Exhibit 10.2
INVACARE CORPORATION
$175,000,000 9 3/4 % Senior Notes due 2015
PURCHASE AGREEMENT
dated February 7, 0000
Xxxx xx Xxxxxxx Securities LLC
KeyBanc Capital Markets, a Division of McDonald Investments Inc.
BMO Capital Markets Corp.
SunTrust Capital Markets, Inc.
Table of Contents
Section 1. Representations, Warranties and Covenants of the Company...................................3
(a) No Registration Required...................................................................3
(b) No Integration of Offerings or General Solicitation........................................3
(c) Eligibility for Resale under Rule 144A.....................................................4
(d) The Offering Memorandum....................................................................4
(e) Incorporated Documents.....................................................................4
(f) The Purchase Agreement.....................................................................5
(g) The Registration Rights Agreement..........................................................5
(h) The DTC Agreement..........................................................................5
(i) Authorization of the Notes, the Exchange Notes and the Guarantees..........................5
(j) Authorization of the Indenture.............................................................6
(k) Description of the Securities and the Indenture............................................6
(l) No Material Adverse Change.................................................................6
(m) Independent Accountants....................................................................6
(n) Preparation of the Financial Statements....................................................7
(o) Incorporation and Good Standing of the Company and the Subsidiary Guarantors...............7
(p) Capitalization and Other Capital Stock Matters.............................................7
(q) Stock Exchange Listing.....................................................................8
(r) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required...................................................................................8
(s) No Material Actions or Proceedings.........................................................9
(t) Intellectual Property Rights...............................................................9
(u) All Necessary Permits, etc................................................................10
(v) Title to Properties.......................................................................10
(w) Tax Law Compliance........................................................................10
(x) Not an Investment Company.................................................................11
(y) Insurance.................................................................................11
(z) No Price Stabilization or Manipulation....................................................11
(aa) Solvency..................................................................................11
(bb) Compliance with Xxxxxxxx-Xxxxx............................................................11
(cc) Company's Accounting System...............................................................11
(dd) Disclosure Controls and Procedures........................................................12
(ee) Compliance with Environmental Laws........................................................12
(ff) ERISA Compliance..........................................................................13
(gg) Compliance with Labor Laws................................................................14
(hh) Related Party Transactions................................................................14
(ii) No Unlawful Contributions or Other Payments...............................................14
(jj) Compliance with Regulation S..............................................................14
(kk) No Outstanding Registration Rights........................................................15
(ll) Forward Looking Statements and Market-Related and Statistical Data........................15
(mm) Senior Credit Facilities..................................................................15
(nn) Convertible Debentures....................................................................15
Section 2. Purchase, Sale and Delivery of the Securities.............................................15
(a) The Securities............................................................................15
(b) The Closing Date..........................................................................16
(c) Delivery of the Securities................................................................16
(d) Initial Purchasers as Qualified Institutional Buyers......................................16
Section 3. Additional Covenants of the Company and the Subsidiary Guarantors.........................16
i
(a) Preparation of Final Offering Memorandum; Initial Purchasers' Review of Proposed
Amendments and Supplements................................................................16
(b) Amendments and Supplements to the Final Offering Memorandum and Other Securities Act
Matters...................................................................................17
(c) Copies of the Offering Memorandum.........................................................17
(d) Blue Sky Compliance.......................................................................17
(e) Use of Proceeds...........................................................................18
(f) The Depository............................................................................18
(g) Additional Issuer Information.............................................................18
(h) Agreement Not To Offer or Sell Additional Securities......................................18
(i) Future Reports to the Initial Purchasers..................................................18
(j) No Integration............................................................................19
(k) No Restricted Resales.....................................................................19
(l) Legended Securities.......................................................................19
(m) PORTAL....................................................................................19
(n) Final Term Sheet..........................................................................19
(o) Written Information Concerning the Offering...............................................19
(p) No Manipulation of Price..................................................................19
Section 4. Payment of Expenses.......................................................................20
Section 5. Conditions of the Obligations of the Initial Purchasers...................................21
(a) Accountants' Comfort Letter...............................................................21
(b) No Material Adverse Change or Ratings Agency Change.......................................21
(c) Opinion of Counsel for the Company........................................................21
(d) Opinion of Counsel for the Initial Purchasers.............................................22
(e) Officers' Certificate.....................................................................22
(f) Chief Financial Officer's Certificate.....................................................22
(g) PORTAL Listing............................................................................22
(h) Registration Rights Agreement and Indenture...............................................22
(i) Concurrent Transactions...................................................................23
(j) Additional Documents......................................................................23
Section 6. Reimbursement of Initial Purchasers' Expenses.............................................23
Section 7. Offer, Sale and Resale Procedures.........................................................23
Section 8. Indemnification...........................................................................25
(a) Indemnification of the Initial Purchasers.................................................25
(b) Indemnification of the Company and the Subsidiary Guarantors..............................25
(c) Notifications and Other Indemnification Procedures........................................26
(d) Settlements...............................................................................27
Section 9. Contribution..............................................................................28
Section 10. Termination of this Agreement.............................................................29
Section 11. Representations and Indemnities to Survive Delivery.......................................29
Section 12. Notices...................................................................................29
Section 13. Successors................................................................................31
Section 14. Partial Unenforceability..................................................................31
Section 15. Governing Law Provisions..................................................................31
Section 16. Default of One or More of the Several Initial Purchasers..................................32
Section 17. No Advisory or Fiduciary Responsibility...................................................32
Section 18. General Provisions........................................................................33
ii
PURCHASE AGREEMENT
February 7, 0000
XXXX XX XXXXXXX SECURITIES LLC
KEYBANC CAPITAL MARKETS,
A DIVISION OF MCDONALD INVESTMENTS INC.
BMO CAPITAL MARKETS CORP.
SUNTRUST CAPITAL MARKETS, INC.
As Initial Purchasers
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Introductory.
Invacare Corporation, an Ohio corporation (the "Company"),
proposes to issue and sell to the several initial purchasers named in Schedule A
(the "Initial Purchasers"), acting severally and not jointly, the respective
amounts set forth in such Schedule A of $175,000,000 aggregate principal amount
of the Company's 9 3/4% Senior Notes due 2015 (the "Notes"). Banc of America
Securities LLC, KeyBanc Capital Markets, a Division of McDonald Investments
Inc., BMO Capital Markets Corp. and SunTrust Capital Markets, Inc. have agreed
to act as the several Initial Purchasers in connection with the offering and
sale of the Notes.
The Securities (as defined below) will be issued pursuant to an indenture,
to be dated as of the Closing Date (as defined in Section 2 hereof) (the
"Indenture"), among the Company, the Subsidiary Guarantors (as defined below),
and Xxxxx Fargo Bank, N.A., as trustee (the "Trustee"). The Securities will be
issued only in book-entry form in the name of Cede & Co., as nominee of The
Depository Trust Company (the "Depository") pursuant to a blanket issuer letter
of representations, to be dated on or before the Closing Date (the "DTC
Agreement"), among the Company and the Depository.
The holders of the Securities will be entitled to the benefits of a
registration rights agreement, to be dated as of the Closing Date (the
"Registration Rights Agreement"), among the Company, the Subsidiary Guarantors
and the Initial Purchasers, pursuant to which the Company and the Subsidiary
Guarantors will agree to file with the Commission (as defined below), under the
circumstances set forth therein, (i) a registration statement under the
Securities Act (as defined below) relating to another series of debt securities
of the Company with terms substantially identical to the Notes (the "Exchange
Notes") to be offered in exchange for the Notes (the "Exchange Offer") and (ii)
to the extent required by the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 of the Securities Act relating to
the resale by certain holders of the Notes, and in each case, to use its best
efforts to cause such registration statements to be declared effective.
Sch B-1
The payment of principal of, premium, if any, and interest on the Notes and
the Exchange Notes will be fully and unconditionally guaranteed on a senior
unsecured basis, jointly and severally, by the Company and certain direct and
indirect subsidiaries of the Company (collectively, the "Subsidiary
Guarantors"), pursuant to their guarantees (the "Guarantees"). The Notes and the
Guarantees attached thereto are herein collectively referred to as the
"Securities;" and the Exchange Notes and the Guarantees attached thereto are
herein collectively referred to as the "Exchange Securities."
The Securities are being sold in connection with a refinancing of a
substantial portion of the Company's outstanding indebtedness (the
"Recapitalization"). The Company will incur approximately $700.0 million of
indebtedness on the Closing Date through:
1. $400.0 million in senior secured credit facilities, (the "Senior
Credit Facilities"), comprising
a. a senior secured revolving credit facility in an amount up
to $150.0 million, of which $50.0 million will be drawn on
the Closing Date; and
b. a senior secured term loan facility aggregating $250.0
million and
2. $175.0 million in proceeds from the sale of the Securities.
3. $125.0 million in proceeds from the sale of convertible senior
subordinated debentures (the "Convertible Debentures").
The proceeds of the Recapitalization shall be used to (i) to pay existing
indebtedness (including repurchase premiums) and (ii) to pay related fees and
expenses.
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
in the Pricing Disclosure Package (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the "Subsequent Purchasers") at any
time after the time this Agreement is executed by the parties hereto (the "Time
of Execution"). The Securities are to be offered and sold to or through the
Initial Purchasers without being registered with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act," which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder), in reliance upon exemptions
therefrom. Pursuant to the terms of the Securities and the Indenture, investors
who acquire Securities shall be deemed to have agreed that Securities may only
be resold or otherwise transferred, after the date hereof, if such Securities
are registered for sale under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemptions afforded by Rule 144A under the Securities Act ("Rule 144A") or
Regulation S under the Securities Act ("Regulation S")).
The Company has prepared and delivered to each Initial Purchaser copies of
a Preliminary Offering Memorandum, dated January 23, 2007 (the "Preliminary
Offering Memorandum"), and has prepared and will deliver to each Initial
Purchaser copies of a Pricing Supplement, dated February 7, 2007 (the "Pricing
Supplement"), describing the terms of the Securities, each for use by such
2
Initial Purchaser in connection with its solicitation of offers to purchase the
Securities. The Preliminary Offering Memorandum and the Pricing Supplement are
herein referred to as the "Pricing Disclosure Package." Promptly after the Time
of Execution, the Company will prepare and deliver to each Initial Purchaser a
final offering memorandum dated the date hereof (the "Final Offering
Memorandum").
All references herein to the term "Pricing Disclosure Package" shall be
deemed to mean and include all information filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act," which term, as
used herein, includes the rules and regulations of the Commission promulgated
thereunder) prior to the Time of Execution and incorporated by reference in the
Pricing Disclosure Package (including the Preliminary Offering Memorandum). All
references to the term "Final Offering Memorandum" shall be deemed to mean and
include all information filed by the Company under the Exchange Act prior to the
date of the Final Offering Memorandum and incorporated by reference in the Final
Offering Memorandum. All references herein to the terms "amend," "amendment" or
"supplement" with respect to the Final Offering Memorandum shall be deemed to
mean and include all information filed under the Exchange Act after the Time of
Execution and incorporated by reference in the Final Offering Memorandum.
The Company hereby confirms its agreements with the Initial Purchasers as
follows:
SECTION 1. Representations, Warranties and Covenants of the Company. Each
of the Company and the Subsidiary Guarantors, jointly and severally, hereby
represents, warrants and covenants to each Initial Purchaser that, as of the
date hereof and as of the Closing Date (references in this Section 1 to the
"Offering Memorandum" are to the Pricing Disclosure Package and the Final
Offering Memorandum, unless the context otherwise requires):
(a) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section 2
hereof and with the procedures set forth in Section 7 hereof, it is not
necessary in connection with the offer, sale and delivery of the Securities
to the Initial Purchasers and to each Subsequent Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register the
Securities under the Securities Act or, until such time as the Exchange
Securities are issued pursuant to an effective registration statement, to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act," which term, as used herein, includes the rules
and regulations of the Commission promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. None of the
Company, the Subsidiary Guarantors, or any of their respective subsidiaries
or affiliates (as such term is defined in Rule 501 under the Securities
Act) (each, an "Affiliate"), or any person acting on its or any of their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has, directly or indirectly, solicited any
offer to buy or offered to sell, or will, directly or indirectly, solicit
any offer to buy or offer to sell, in the United States or to any United
States citizen or resident, any security which is or would be integrated
with the sale of the Securities in a manner that would require the
3
Securities to be registered under the Securities Act. None of the Company,
the Subsidiary Guarantors or any of their respective subsidiaries or
Affiliates, or any person acting on its or any of their behalf (other than
the Initial Purchasers, as to whom the Company makes no representation or
warranty) has engaged or will engage, in connection with the offering of
the Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502 under the Securities Act. With respect to
those Securities sold in reliance upon Regulation S, (i) none of the
Company, the Subsidiary Guarantors or any of their respective subsidiaries
or Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation or
warranty) has engaged or will engage in any directed selling efforts within
the meaning of Regulation S and (ii) each of the Company, the Subsidiary
Guarantors and any of their respective subsidiaries and Affiliates and any
person acting on their its or their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation or warranty) has
complied and will comply with the offering restrictions set forth in
Regulation S.
(c) Eligibility for Resale under Rule 144A. The Securities are
eligible for resale pursuant to Rule 144A and will not be, at the Closing
Date, of the same class as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.
(d) The Offering Memorandum. As of the Time of Execution, the Pricing
Disclosure Package does not, and at all times subsequent thereto up to the
Closing Date will not, and the Final Offering Memorandum, as of its date,
does not, and at all times subsequent thereto up to the Closing Date will
not, contain or represent an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that this representation, warranty and agreement shall not apply
to statements in or omissions from the Pricing Disclosure Package, the
Final Offering Memorandum or any amendment or supplement thereto made in
reliance upon and in conformity with information furnished to the Company
in writing by any Initial Purchaser through Banc of America Securities LLC
expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or any amendment or supplement thereto, as the case may be. The
Pricing Disclosure Package contains, and the Final Offering Memorandum will
contain, all the information specified in, and meeting the requirements of,
Rule 144A. The Company has not distributed and will not distribute, prior
to the later of the Closing Date and the completion of the Initial
Purchasers' distribution of the Securities (notice of which shall be given
to the Company by the Initial Purchasers if occurring after the Closing
Date), any offering material in connection with the offering and sale of
the Securities other than the Pricing Disclosure Package and the Final
Offering Memorandum, or any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they were
or hereafter are filed with the Commission (collectively, the "Incorporated
Documents") complied and will comply in all material respects with the
requirements of the Exchange Act.
4
(f) The
Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and each of the Subsidiary
Guarantors.
(g) The Registration Rights Agreement. The Registration Rights
Agreement has been duly authorized and, on the Closing Date, will have been
duly executed and delivered by, and (assuming the due execution by the
Initial Purchasers) will constitute a valid and binding agreement of, the
Company and each of the Subsidiary Guarantors, enforceable against the
Company and each of the Subsidiary Guarantors in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles and
except as rights to indemnification, contribution or exculpation under the
Registration Rights Agreement may be limited by applicable law or public
policy.
(h) The DTC Agreement. The DTC Agreement has been duly authorized and,
on the Closing Date, will have been duly executed and delivered by, and
(assuming the due execution by the Depository) will constitute a valid and
binding agreement of, the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(i) Authorization of the Notes, the Exchange Notes and the Guarantees.
(i) The Notes to be purchased by the Initial Purchasers from the Company
will be in the form contemplated by the Indenture, have been duly
authorized for issuance and sale pursuant to this Agreement and the
Indenture and, at the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture
and delivered against payment of the purchase price therefor, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles and
will be entitled to the benefits of the Indenture. (ii) The Exchange Notes
have been duly and validly authorized for issuance by the Company, and when
issued and authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or affecting enforcement of the rights and remedies of
creditors or by general principles of equity and will be entitled to the
benefits of the Indenture. (iii) The Guarantees of the Notes and the
Exchange Notes will be in the respective forms contemplated by the
Indenture, have been duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and, at the Closing Date, will have been duly
executed by each of the Subsidiary Guarantors and, when the Notes and the
Exchange Notes have been authenticated in the manner provided for in the
Indenture and delivered to you against payment of the purchase price
therefor, will constitute valid and binding agreements of the Subsidiary
Guarantors, enforceable against the Subsidiary Guarantors in accordance
5
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the Indenture.
(j) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and the Subsidiary Guarantors and, at the Closing
Date, will have been duly executed and delivered by, and will (assuming due
execution and delivery by the Trustee) constitute a valid and binding
agreement of, the Company and the Subsidiary Guarantors, enforceable
against the Company and the Subsidiary Guarantors in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(k) Description of the Securities and the Indenture. The Securities,
the Exchange Securities and the Indenture conform, or will conform, in all
material respects to the descriptions thereof contained in the Offering
Memorandum.
(l) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum, subsequent to the respective dates as of which
information is given in the Offering Memorandum: (i) there has been no
material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, or operations,
whether or not arising from transactions in the ordinary course of
business, of the Company, the Subsidiary Guarantors and their respective
subsidiaries, considered as one entity (any such change or development is
called a "Material Adverse Change"); (ii) the Company, the Subsidiary
Guarantors and their respective subsidiaries, considered as one entity,
have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company or, except for dividends paid to the Company or
other subsidiaries, any of its subsidiaries on any class of capital stock
or repurchase or redemption by the Company or any of its subsidiaries of
any class of capital stock, and for any quarterly cash dividend on the
Company's common shares to the extent that the aggregate cash dividend per
common share related to any fiscal quarter does not exceed $0.0125, which
amount will be proportionally adjusted in the event of any subdivisions,
splits and combinations of the Company's common shares.
(m) Independent Accountants. Ernst & Young LLP, which expressed its
opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) included in the Offering
Memorandum, are independent public or certified public accountants within
the meaning of Regulation S-X under the Securities Act and the Exchange
Act, and any non-audit services provided by Ernst & Young LLP to the
Company or any of the Subsidiary Guarantors have been approved by the Audit
Committee of the Board of Directors of the Company.
6
(n) Preparation of the Financial Statements. The financial statements,
together with the related schedules and notes, included or incorporated by
reference in the Offering Memorandum present fairly the consolidated
financial position of the entities to which they relate as of and at the
dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles in the United
States applied on a consistent basis throughout the periods covered
thereby, except as may be expressly stated in the related notes thereto.
The financial statements comply in all material respects with the
applicable requirements of the Exchange Act. The financial information set
forth in the Offering Memorandum under the captions "Offering Memorandum
Summary - Summary Consolidated Financial Data", "Selected Historical
Consolidated Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the
audited financial statements contained in the Offering Memorandum. There
would be no pro forma financial statements required to be included in the
Offering Memorandum if the requirements applicable to registration
statements on Form S-1 under the Securities Act were applicable to the
Offering Memorandum.
(o) Incorporation and Good Standing of the Company and the Subsidiary
Guarantors. Each of the Company and the Subsidiary Guarantors has been duly
incorporated or formed and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
formation and has corporate, partnership or company, as the case may be,
power and authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and, in the case of
the Company and the Subsidiary Guarantors, to enter into and perform its
respective obligations under each of this Agreement, the Registration
Rights Agreement, the DTC Agreement, the Securities, the Exchange
Securities and the Indenture, as the case may be, to which it is a party.
Each of the Company and the Subsidiary Guarantors is duly qualified as a
foreign corporation, limited partnership or limited liability company, as
the case may be, to transact business and is in good standing or equivalent
status in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or
to be in good standing would not, individually or in the aggregate, result
in a Material Adverse Change. All of the issued and outstanding capital
stock of each Subsidiary Guarantor has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim. The Company does not own or
control, directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Exhibit A hereto.
(p) Capitalization and Other Capital Stock Matters. At September 30,
2006, on an actual basis, and on an as adjusted basis, after giving pro
forma effect to the Recapitalization, the Company would have an authorized
and outstanding capitalization as set forth in the Offering Memorandum
under the caption "Capitalization" (other than for subsequent issuances of
capital stock, if any, pursuant to employee benefit plans described in the
Offering Memorandum or upon exercise of outstanding options or warrants
7
described in the Offering Memorandum). All of the outstanding common shares
of the Company (the "Common Shares") have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the outstanding Common
Shares were issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of
the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries other than
those accurately described in the Offering Memorandum. The description of
the options or other rights granted and/or exercised under the Company's
stock option plans set forth in the Offering Memorandum accurately and
fairly describes such options and rights.
(q) Stock Exchange Listing. The Common Shares are registered pursuant
to Section 12(b) of the Exchange Act and are listed on the
New York Stock
Exchange ("NYSE"), and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common
Shares under the Exchange Act or delisting the Common Shares from the NYSE,
nor has the Company received any notification that the Commission or the
NYSE is contemplating terminating such registration or listing.
(r) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. None of the Company, the Subsidiary
Guarantors or any of their respective significant subsidiaries is in
violation of its charter, by-laws, partnership agreement, limited liability
company agreement or similar constitutive document. Except as specifically
disclosed in the Offering Memorandum, none of the Company, the Subsidiary
Guarantors or any of their respective subsidiaries is in default (or, with
the giving of notice or lapse of time, would be in default) ("Default")
under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease, license or other instrument to which the Company, any of
the Subsidiary Guarantors or any of their respective subsidiaries is a
party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of the Subsidiary Guarantors or
any of their respective subsidiaries is subject (each, an "Existing
Instrument"), except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The execution, delivery and
performance of this Agreement, the Registration Rights Agreement, the DTC
Agreement, the Indenture, the agreements for the Senior Credit Facilities
(the "Senior Credit Facilities Transaction Documents") and the agreements
for the Convertible Debentures (the "Convertible Debentures Transaction
Documents") offering by the Company and each Guarantor party thereto, and
the issuance and delivery of the Securities and the Exchange Securities and
the use of proceeds thereof, and the consummation of the Recapitalization
and the transactions contemplated hereby and thereby and by the Offering
Memorandum (i) have been duly authorized by all necessary corporate,
partnership or company, as the case may be, action and will not result in
any violation of the provisions of the charter, by-laws, partnership
agreement, operating agreement or other similar constitutive document of
the Company, any Subsidiary Guarantor or any of their respective
subsidiaries, (ii) will not, upon consummation of the Recapitalization,
conflict with or constitute a breach of, or Default or a Debt Repayment
8
Triggering Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company, any Subsidiary Guarantor or any of their respective
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate,
result in a Material Adverse Change, and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company, any Subsidiary Guarantor or any of their
respective subsidiaries, except for such violations as would not,
individually or in the aggregate, result in a Material Adverse Change. No
consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or
agency, is required for the Company's and the Subsidiary Guarantors'
execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the DTC Agreement, the Indenture, the Senior Credit
Facilities Transaction Documents, or the Convertible Debentures Transaction
Documents to which it is a party, or the issuance and delivery of the
Securities or the Exchange Securities and the use of proceeds thereof, or
consummation of the Recapitalization and the transactions contemplated
hereby and thereby and by the Offering Memorandum, except such as have been
obtained or made by the Company or the Subsidiary Guarantors and are in
full force and effect under the Securities Act, applicable securities laws
of the several states of the United States or provinces of Canada and
except such as may be required by the securities laws of the several states
of the United States or provinces of Canada with respect to the Company's
obligations under the Registration Rights Agreement. As used herein, a
"Debt Repayment Triggering Event" means any event or condition which gives,
or with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company, the
Subsidiary Guarantors or any of their respective subsidiaries.
(s) No Material Actions or Proceedings. There are no legal or
governmental actions, suits, investigations or proceedings pending or, to
the Company's or any Subsidiary Guarantor's knowledge, threatened (i)
against or affecting the Company, any Subsidiary Guarantor or any of their
respective subsidiaries or (ii) which has as the subject thereof any
property owned or leased by, the Company, the Subsidiary Guarantors or any
of their respective subsidiaries, and any such action, suit, investigation
or proceeding, if determined adversely to the Company, such Subsidiary
Guarantor or such subsidiary would result in a Material Adverse Change or
adversely affect the consummation of the transactions contemplated by this
Agreement. No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the Company's knowledge, is
threatened or imminent.
(t) Intellectual Property Rights. The Company, the Subsidiary
Guarantors and their respective subsidiaries own, possess or license
sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively,
"Intellectual Property Rights") reasonably necessary to conduct their
businesses as now conducted except where the failure to own, possess or
license such Intellectual Property Rights would not, individually or in the
9
aggregate, result in a Material Adverse Change; and the expected expiration
of any such Intellectual Property Rights, individually or in the aggregate,
would not result in a Material Adverse Change. None of the Company, the
Subsidiary Guarantors or any of their respective subsidiaries has received
any notice of infringement or conflict with asserted Intellectual Property
Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, ruling or filing would result in a Material Adverse
Change. None of the Company, the Subsidiary Guarantors or any of their
respective subsidiaries is in default under the terms of any license or
similar agreement related to any Intellectual Property Rights necessary to
conduct their business as now conducted or contemplated except as would not
result in a Material Adverse Change.
(u) All Necessary Permits, etc. Each of the Company, the Subsidiary
Guarantors and their respective subsidiaries possess such valid and current
certificates, franchises, grants, authorizations, qualifications, licenses,
permits, easements, variances, exceptions, certifications, registrations,
consents certificates or approvals issued by the appropriate local, state,
federal or foreign regulatory agencies or bodies ("Permits") necessary for
it to own, lease and operate the assets and properties or to conduct their
respective businesses except where the failure to possess such Permits
would not, individually or in the aggregate, result in a Material Adverse
Change, and none of the Company, the Subsidiary Guarantors or any of their
respective subsidiaries has received any notice of proceedings relating to
the revocation, cancellation or modification of, or non-compliance with,
any such certificate, authorization or permit which, either individually or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Change.
(v) Title to Properties. The Company, the Subsidiary Guarantors and
each of their respective subsidiaries have good and marketable title to all
items of real property and valid title to all the properties and assets
reflected as owned in the financial statements referred to in Section 1(n)
hereof (or elsewhere in the Offering Memorandum), in each case free, except
for Permitted Liens (as defined in the Offering Memorandum) and clear of
any security interests, mortgages, liens, encumbrances, equities, claims
and other defects, except such as do not materially and adversely affect
the value of such property and do not materially interfere with the use
made or proposed to be made of such property by the Company, such
Subsidiary Guarantor or such subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company, any
Subsidiary Guarantor or any subsidiary are held under valid and enforceable
leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company, such
Subsidiary Guarantor or such subsidiary.
(w) Tax Law Compliance. The Company, the Subsidiary Guarantors and
their respective subsidiaries have filed all necessary federal, state and
foreign income and franchise tax returns and have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except for where
the failure to file such returns or pay such taxes and any related
10
assessments, fines or penalties would not, individually or in the
aggregate, result in a Material Adverse Change.
(x) Not an Investment Company. The Company and the Subsidiary
Guarantors have been advised of the rules and requirements under the
Investment Company Act of 1940, as amended (the "Investment Company Act,"
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder). The Company and the Subsidiary
Guarantors and their respective subsidiaries are not, and after receipt of
payment for the Securities will not be, an "investment company" within the
meaning of the Investment Company Act.
(y) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound institutions (or are self-insured) with
policies in such amounts and with such deductibles and policy limits and
covering such risks as are generally deemed adequate, appropriate and
customary for their businesses.
(z) No Price Stabilization or Manipulation. None of the Company, the
Subsidiary Guarantors or any of their respective Affiliates has taken or
will take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities.
(aa) Solvency. The Company and the Subsidiary Guarantors considered
together on a consolidated basis are, and immediately after the Closing
Date will be, Solvent. As used herein, the term "Solvent" means, with
respect to any person on a particular date, that on such date (i) the fair
market value of the assets of such person is greater than the total amount
of liabilities (including contingent liabilities) of such person, (ii) the
present fair salable value of the assets of such person is greater than the
amount that will be required to pay the probable liabilities of such person
on its debts as they become absolute and matured, (iii) such person is able
to realize upon its assets and pay its debts and other liabilities,
including contingent obligations, as they mature and (iv) such person does
not have unreasonably small capital.
(bb) Compliance with Xxxxxxxx-Xxxxx. The Company and its officers and
directors are in material compliance with the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 0000 (xxx "Xxxxxxxx-Xxxxx Xxx," which term, as used
herein, includes the rules and regulations of the Commission promulgated
thereunder).
(cc) Company's Accounting System. The Company maintains a system of
accounting controls that is in compliance with the Xxxxxxxx-Xxxxx Act and
is sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
11
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(dd) Disclosure Controls and Procedures. The Company has established
and maintains disclosure controls and procedures (as such term is defined
in Rules 13a-15 and 15d-14 under the Exchange Act); such disclosure
controls and procedures are designed to ensure that material information
relating to the Company and its subsidiaries is made known to the chief
executive officer and chief financial officer of the Company by others
within the Company or any of its subsidiaries, and such disclosure controls
and procedures are reasonably effective to perform the functions for which
they were established subject to the limitations of any such control
system; the Company's auditors and the Audit Committee of the Board of
Directors of the Company have been advised of: (i) any significant
deficiencies or material weaknesses in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data; and (ii) any fraud, whether
or not material, that involves management or other employees who have a
role in the Company's internal controls; and since the date of the most
recent evaluation of such disclosure controls and procedures, there have
been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(ee) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change: (i)
the Company, the Subsidiary Guarantors and each of their respective
subsidiaries have all permits, authorizations and approvals required under
any Environmental Laws (as defined below) and are in compliance with their
requirements, (ii) none of the Company, the Subsidiary Guarantors or any of
their respective subsidiaries is in violation of any federal, state, local
or foreign law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), nor has the
Company, any Subsidiary Guarantor or any of their respective subsidiaries
12
received any written communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that either the
Company, any Subsidiary Guarantor or any of their respective subsidiaries
is in violation of any Environmental Law; (iii) there is no claim, action
or cause of action filed with a court or governmental authority, no
investigation with respect to which the Company has received written
notice, and no written notice by any person or entity alleging potential
liability for investigatory costs, cleanup costs, governmental responses
costs, natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company, any
Subsidiary Guarantor or any of their respective subsidiaries, now or in the
past (collectively, "Environmental Claims"), pending or, to the Company's
and the Subsidiary Guarantors' knowledge, threatened against the Company,
any Subsidiary Guarantor or any of their respective subsidiaries or any
person or entity whose liability for any Environmental Claim the Company,
any Subsidiary Guarantor or any of their respective subsidiaries has
retained or assumed either contractually or by operation of law; and (iv)
to the Company's and the Subsidiary Guarantors' knowledge, there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that could
result in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company, any Subsidiary Guarantor
or any of their respective subsidiaries or against any person or entity
whose liability for any Environmental Claim the Company, any Subsidiary
Guarantor or any of their respective subsidiaries has retained or assumed
either contractually or by operation of law. Neither the Company nor any of
its subsidiaries has been named as a "potentially responsible party" under
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended.
(ff) ERISA Compliance. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974 (as amended, "ERISA," which term, as used herein,
includes the regulations and published interpretations thereunder)
established or maintained by the Company, its subsidiaries or their "ERISA
Affiliates" (as defined below) are in compliance in all material respects
with ERISA, except where the failure to be in compliance would not,
individually or in the aggregate, result in a Material Adverse Change.
"ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Section 414 of the
Internal Revenue Code of 1986 (as amended, the "Code," which term, as used
herein, includes the regulations and published interpretations thereunder)
of which the Company or such subsidiary is a member. No "reportable event"
(as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any "employee benefit plan" established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates, except
where any such occurrence would not, individually or in the aggregate,
result in a Material Adverse Change. No "employee benefit plan" established
or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA) , except
for such "amount of unfunded benefit liabilities" as would not,
individually or in the aggregate, result in a Material Adverse Change.
Neither the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code, except
for any such liability as would not, individually or in the aggregate,
result in a Material Adverse Change. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401 of the
Code is so qualified and nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification, except where the
failure to be so qualified or the loss of such qualification would not,
13
individually or in the aggregate, result in a Material Adverse Change.
(gg) Compliance with Labor Laws. Except as would not, individually or
in the aggregate, result in a Material Adverse Change, (i) there is (A) no
unfair labor practice complaint pending or, to the Company's knowledge,
threatened against the Company, the Subsidiary Guarantors or any of their
respective subsidiaries before the National Labor Relations Board or any
state or local labor relations board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements
pending, or to the Company's knowledge, threatened, against the Company,
the Subsidiary Guarantors or any of their respective subsidiaries and (B)
no strike, labor dispute, slowdown or stoppage pending or, to the best of
the Company's knowledge, threatened against the Company, the Subsidiary
Guarantors or any of their respective subsidiaries.
(hh) Related Party Transactions. All relationships, direct or
indirect, that exist between or among any of the Company, the Subsidiary
Guarantors or any of their respective Affiliates, on the one hand, and any
former or current director, officer, manager, member, stockholder, customer
or supplier of any of them, on the other hand, which are required to be
disclosed in a registration statement on Form S-1 under Item 404 of
Regulation S-K has been disclosed in the Offering Memorandum. There are no
outstanding loans, advances (except advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company,
the Subsidiary Guarantors or any of their respective Affiliates to or for
the benefit of any of the officers or directors of the Company, the
Subsidiary Guarantors or any of their respective Affiliates or any of their
respective family members that are prohibited under the Xxxxxxxx-Xxxxx Act.
(ii) No Unlawful Contributions or Other Payments. Neither the Company,
the Subsidiary Guarantors or any of their respective subsidiaries nor, to
the Company's and the Subsidiary Guarantors' knowledge, any director,
officer, employee or agent of the Company, any Subsidiary Guarantor or any
of their respective subsidiaries, has, directly or indirectly (i) made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character necessary to be disclosed in the Offering Memorandum in order to
make the statements therein not misleading, (ii) used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(jj) Compliance with Regulation S. The Company, the Subsidiary
Guarantors, their respective affiliates and all persons acting on their
behalf (other than the Initial Purchasers, as to whom the Company and the
Subsidiary Guarantors make no representation) have complied with and will
comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Securities outside the United States
and, in connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902. The Company is a "reporting issuer," as
defined in Rule 902 under the Securities Act.
14
(kk) No Outstanding Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered
by the company under the Securities Act.
(ll) Forward Looking Statements and Market-Related and Statistical
Data. No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) or presentation of
market-related or statistical data contained in the Pricing Disclosure
Package or the Final Offering Memorandum has been made therein without a
reasonable basis or has been presented therein other than in good faith.
(mm) Senior Credit Facilities. The Senior Credit Facilities have been
duly and validly authorized by the Company and, when duly executed and
delivered by the Company and the Subsidiary Guarantors, will be the valid
and legally binding obligation of the Company, the Subsidiary Guarantors
and their respective affiliates, enforceable in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles. The representations and warranties in the Senior Credit
Facilities are true and correct as of the respective dates such
representations and warranties are made under the Senior Credit Facilities.
(nn) Convertible Debentures. The Convertible Debentures have been duly
and validly authorized by the Company and, when duly executed and delivered
by the Company and the Subsidiary Guarantors, will be the valid and legally
binding obligation of the Company, the Subsidiary Guarantors and their
respective affiliates, enforceable in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
The representations and warranties in the
purchase agreement dated February
5, 2007 among the Company, the guarantors named therein and the Initial
Purchasers in connection with the Convertible Debentures are true and
correct as of the respective dates such representations and warranties are
made under such
purchase agreement.
Any certificate signed by an officer of the Company, any Subsidiary
Guarantor or any of their respective subsidiaries and delivered to the Initial
Purchasers or to counsel for the Initial Purchasers shall be deemed to be a
representation and warranty by the Company, such Subsidiary Guarantor or such
subsidiary to each Initial Purchaser as to the matters set forth therein.
SECTION 2. Purchase, Sale and Delivery of the Securities.
(a) The Securities. Each of the Company and the Subsidiary Guarantors
agrees to issue and sell to the Initial Purchasers, severally and not
jointly, all of the Securities, and the Initial Purchasers agree, severally
and not jointly, to purchase from the Company the aggregate principal
amount of Securities set forth opposite their names on Schedule A, at a
purchase price of 96.642% of the principal amount thereof payable on the
15
Closing Date, in each case, on the basis of the representations, warranties
and agreements herein contained, and upon the terms, subject to the
conditions thereto, herein set forth.
(b) The Closing Date. Delivery of certificates for the Securities in
definitive form to be purchased by the Initial Purchasers and payment
therefor shall be made at the offices of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx LLP, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other
place as may be agreed to by the Company and Banc of America Securities LLC
at 8 a.m. EST, on February 12, 2007 or such other time and date as may be
designated by agreement between the Company and Banc of America Securities
LLC (the time and date of such closing are called the "Closing Date").
(c) Delivery of the Securities. The Company shall deliver, or cause to
be delivered, to Banc of America Securities LLC for the respective accounts
of the several Initial Purchasers certificates for the Notes and the
Guarantees at the Closing Date against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase
price therefor to an account or accounts specified by the Company. The
certificates for the Notes shall be in such denominations as the Initial
Purchasers may request not less than one full Business Day in advance of
the Closing Date and registered in the name of Cede & Co., as nominee of
the Depository, pursuant to the DTC Agreement, and shall be made available
for inspection on the business day preceding the Closing Date at a location
in
New York City, as Banc of America Securities LLC may designate. Time
shall be of the essence, and delivery at the time and place specified in
this Agreement is a further condition to the obligations of the Initial
Purchasers.
(d) Initial Purchasers as Qualified Institutional Buyers. Each Initial
Purchaser severally and not jointly represents and warrants to, and agrees
with, the Company that it is a "qualified institutional buyer" within the
meaning of Rule 144A (a "Qualified Institutional Buyer").
SECTION 3. Additional Covenants of the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors, jointly and severally,
further covenant and agree with each Initial Purchaser as follows:
(a) Preparation of Final Offering Memorandum; Initial Purchasers'
Review of Proposed Amendments and Supplements. As promptly as practicable
following the Time of Execution and in any event not later than 9:00am on
the business day following the date hereof, the Company will prepare and
deliver to the Initial Purchasers the Final Offering Memorandum, which
shall consist of the Preliminary Offering Memorandum as modified only by
the information contained in the Pricing Supplement. The Company will not
amend or supplement the Preliminary Offering Memorandum or the Pricing
Supplement. The Company will not amend or supplement the Final Offering
Memorandum prior to the Closing Date unless the Initial Purchasers shall
previously have been furnished a copy of the proposed amendment or
supplement at least two business days prior to the proposed use or filing,
and shall not have objected to such amendment or supplement.
16
(b) Amendments and Supplements to the Final Offering Memorandum and
Other Securities Act Matters. If, prior to the later of (x) the Closing
Date and (y) the completion of the placement of the Securities by the
Initial Purchasers with the Subsequent Purchasers, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement
the Final Offering Memorandum, as then amended or supplemented, in order to
make the statements therein, in the light of the circumstances when the
Final Offering Memorandum is delivered to a Subsequent Purchaser, not
misleading, or if it is otherwise necessary to amend or supplement the
Final Offering Memorandum to comply with law, the Company agrees to
promptly prepare (subject to Section 3 hereof), and furnish at its own
expense to the Initial Purchasers, amendments or supplements to the Final
Offering Memorandum so that the statements in the Final Offering Memorandum
as so amended or supplemented will not, in the light of the circumstances
at the Closing Date and at the time of sale of Securities, be misleading or
so that the Final Offering Memorandum, as amended or supplemented, will
comply with all applicable law.
Following the consummation of the Exchange Offer or the effectiveness
of an applicable shelf registration statement and for so long as the
Securities are outstanding if, in the judgment of the Initial Purchasers,
the Initial Purchasers or any of their affiliates (as such term is defined
in the Securities Act) are required to deliver a prospectus in connection
with sales of, or market-making activities with respect to, the Securities,
to periodically amend the applicable registration statement so that the
information contained therein complies with the requirements of Section 10
of the Securities Act, to amend the applicable registration statement or
supplement the related prospectus or the documents incorporated therein
when necessary to reflect any material changes in the information provided
therein so that the registration statement and the prospectus will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances existing as of the date the prospectus is so
delivered, not misleading and to provide the Initial Purchasers with copies
of each amendment or supplement filed and such other documents as the
Initial Purchasers may reasonably request.
The Company and the Subsidiary Guarantors hereby expressly acknowledge
that the indemnification and contribution provisions of Sections 8 and 9
hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in
this Section 3.
(c) Copies of the Offering Memorandum. The Company agrees to furnish
the Initial Purchasers, without charge, as many copies of the Pricing
Disclosure Package and the Final Offering Memorandum and any amendments and
supplements thereto as they shall have reasonably requested.
(d) Blue Sky Compliance. Each of the Company and the Subsidiary
Guarantors shall cooperate with the Initial Purchasers and counsel for the
Initial Purchasers to qualify or register (or to obtain exemptions from
qualifying or registering) all or any part of the Securities for offer and
sale under the securities laws of the several states of the United States,
the provinces of Canada or any other jurisdictions reasonably designated by
17
the Initial Purchasers, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required
for the distribution of the Securities. None of the Company or any of the
Subsidiary Guarantors shall be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process
in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will
advise the Initial Purchasers promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
registration or exemption, each of the Company and the Subsidiary
Guarantors shall use its reasonable best efforts to obtain the withdrawal
thereof at the earliest possible moment.
(e) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Securities sold by it in the manner described under the caption
"Use of Proceeds" in the Pricing Disclosure Package.
(f) The Depository. The Company will cooperate with the Initial
Purchasers and use its reasonable best efforts to permit the Securities to
be eligible for clearance and settlement through the facilities of the
Depository.
(g) Additional Issuer Information. Prior to the completion of the
placement of the Securities by the Initial Purchasers with the Subsequent
Purchasers, the Company shall file, on a timely basis, with the Commission
and the NYSE all reports and documents required to be filed under Section
13 or 15 of the Exchange Act.
(h) Agreement Not To Offer or Sell Additional Securities. During the
period of 180 days following the date hereof, the Company and each of the
Subsidiary Guarantors will not, without the prior written consent of the
Initial Purchasers (which consent may be withheld at the sole discretion of
the Initial Purchasers), directly or indirectly, sell, offer, contract or
grant any option to sell, pledge, transfer or establish an open "put
equivalent position" or liquidate or decrease a "call equivalent position"
within the meaning of Rule 16a-1 under the Exchange Act, or otherwise
dispose of or transfer, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition of) or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any debt securities of the Company or any of
the Subsidiary Guarantors or securities exchangeable for or convertible
into debt securities of the Company or any of the Subsidiary Guarantors
(other than as contemplated by this Agreement and to register the Exchange
Securities).
(i) Future Reports to the Initial Purchasers. At any time when the
Company is not subject to Section 13 or 15 of the Exchange Act and any
Securities or Exchange Securities remain outstanding, the Company will
furnish to the Initial Purchasers: (i) as soon as reasonably practicable
after the end of each fiscal year, copies of the Annual Report of the
Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows
18
for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
reasonably practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other report filed by the Company with the
Commission or any securities exchange; and (iii) as soon as reasonably
available, copies of any report or communication of the Company mailed
generally to holders of its capital stock or debt securities (including the
holders of the Securities), if, in each case, such documents are not filed
with the Commission within the time periods specified by the Commission's
rules and regulations under Section 13 or 15 of the Exchange Act.
(j) No Integration. The Company agrees that it will not, and will
cause its Affiliates and subsidiaries not to, make any offer or sale of
securities of the Company of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the Securities Act, such offer
or sale would render invalid (for the purpose of (i) the sale of the
Securities by the Company to the Initial Purchasers, (ii) the resale of the
Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the Securities Act provided
by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(k) No Restricted Resales. During the period of two years after the
Closing Date, the Company will not, and will not permit any of its
affiliates (as defined in Rule 144 under the Securities Act) to resell any
of the Securities which constitute "restricted securities" under Rule 144
that have been reacquired by any of them.
(l) Legended Securities. Each certificate for a Security will bear the
legend contained in "Notice to Investors" in the Preliminary Offering
Memorandum for the time period and upon the other terms stated in the
Preliminary Offering Memorandum.
(m) PORTAL. The Company will use its commercially reasonable efforts
to cause such Securities to be eligible for trading in the PORTALSM Market.
(n) Final Term Sheet. The Company will prepare a final term sheet,
containing solely a description of the Securities and the offering thereof,
in the form approved by you and attached as Schedule B hereto (the "Final
Term Sheet").
(o) Written Information Concerning the Offering. Without the prior
written consent of Banc of America Securities LLC, the Company will not
give to any prospective purchaser of the Securities or any other person not
in its employ any written information concerning the offering of the
Securities other than the Pricing Disclosure Package, the Final Offering
Memorandum or any other offering materials prepared by or with the prior
consent of Banc of America Securities LLC other than its agents,
representatives, directors or advisors (including, without limitation,
bankers and financial advisors).
(p) No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has
19
constituted or might reasonably be expected to constitute, under the
Exchange Act or otherwise, the stabilization or manipulation of the price
of any securities of the Company to facilitate the sale or resale of the
Securities in violation of the Exchange Act.
Banc of America Securities LLC, on behalf of the several Initial
Purchasers, may, in its sole discretion, waive in writing the performance by the
Company or any Subsidiary Guarantor of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 4. Payment of Expenses. Each of the Company and the Subsidiary
Guarantors agrees to pay all reasonable costs, fees and expenses incurred in
connection with the performance of its obligations hereunder, including, without
limitation, (i) all expenses incident to the issuance and delivery of the
Securities (including all printing and engraving costs), (ii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Securities to the Initial Purchasers, (iii) all fees and expenses of the
Company's and the Subsidiary Guarantors' counsel, independent public or
certified public accountants and other advisors, (iv) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Pricing Disclosure Package and the Final Offering Memorandum
(including financial statements and exhibits), and all amendments and
supplements thereto, this Agreement, the Registration Rights Agreement, the
Indenture, the DTC Agreement and the Notes and Guarantees, (v) all filing fees
and expenses, including reasonable fees and disbursements of counsel for the
Initial Purchasers, in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Securities for offer and sale under the securities laws of the several states of
the United States, the provinces of Canada or other jurisdictions designated by
the Initial Purchasers (including, without limitation, the cost of preparing,
printing and mailing preliminary and final blue sky or legal investment
memoranda and any related supplements to the Pricing Disclosure Package or the
Final Offering Memorandum, (vi) the fees and expenses of the Trustee, including
the fees and disbursements of counsel for the Trustee in connection with the
Indenture, the Securities and the Exchange Securities, (vii) any fees payable in
connection with the rating of the Securities or the Exchange Securities with the
ratings agencies and the listing of the Securities with the PORTAL Market,
(viii) any filing fees incident to, and any reasonable fees and disbursements of
counsel to the Initial Purchasers in connection with the review by the NASD of
the terms of the sale of the Securities or the Exchange Securities, (ix) all
fees and expenses (including reasonable fees and expenses of counsel) of the
Company and the Subsidiary Guarantors in connection with approval of the
Securities by the Depository for "book-entry" transfer, and the performance by
the Company and the Subsidiary Guarantors of their respective other obligations
under this Agreement (x) all of the Company's and the Subsidiary Guarantors'
expenses incident to the "road show" for the offering of the Securities, (xi)
50% of the cost of any airplane chartered for the "road show" for the offering
of the Securities, but excluding other road show expenses incurred by the
Initial Purchasers and (xii) all reasonable legal fees, costs and expenses of
the Initial Purchasers for the preparation of the commitment letter dated
December 21, 2006, by and between Bank of America, N.A., Banc of America Bridge
LLC, Banc of America Securities LLC, National City Bank, KeyBank National
Association, McDonald Investments Inc. and the Company, including the annexes
thereto, and the fee letter and engagement letter delivered in connection
therewith (together, the "Commitment Letter") and any due diligence undertaken
in relation to the Recapitalization contemplated hereby.
20
SECTION 5. Conditions of the Obligations of the Initial Purchasers. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Subsidiary Guarantors set forth in Section 1 hereof as of the date hereof
and as of the Closing Date as though then made and to the timely performance by
the Company and the Subsidiary Guarantors of their covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the Initial
Purchasers shall have received from Ernst & Young LLP, independent public
or certified public accountants for the Company, a "comfort letter" dated
the date hereof addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, covering the financial information
in the Preliminary Offering Memorandum and the Pricing Supplement and other
customary matters. In addition, on the Closing Date, the Initial Purchasers
shall have received from such accountants, a "bring-down comfort letter"
dated the Closing Date addressed to the Initial Purchasers, in form and
substance satisfactory to the Initial Purchasers, in the form of the
"comfort letter" delivered on the date hereof, except that (i) it shall
cover the financial information in the Final Offering Memorandum and any
amendment or supplement thereto and (ii) procedures shall be brought down
to a date no more than three business days prior to the Closing Date.
(b) No Material Adverse Change or Ratings Agency Change. For the
period from and after the date of this Agreement and prior to the Closing
Date:
(i) in the judgment of the Initial Purchasers there shall not
have occurred any Material Adverse Change, except as set forth or
contemplated in the Pricing Disclosure Package; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any securities or
indebtedness of the Company, any Subsidiary Guarantor or any of their
respective subsidiaries by any "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule 436
under the Securities Act.
(c) Opinion of Counsel for the Company. On the Closing Date, the
Initial Purchasers shall have received the favorable opinion of (i) Xxxxxx,
Halter & Xxxxxxxx LLP, counsel for the Company, dated as of such Closing
Date, to be provided in form and substance reasonably acceptable to the
Initial Purchasers, and a reliance letter to the Initial Purchasers for
such firm's opinion given in connection with the Convertible Debentures
offering and the Senior Credit Facilities transaction; (ii) the General
Counsel of the Company, dated as of such Closing date, to be provided in
form and substance reasonably acceptable to the Initial Purchasers, and a
reliance letter to the Initial Purchasers for his opinion given in
connection with the Convertible Debentures offering and the Senior Credit
Facilities transaction; (iii) Harter Seacrest & Xxxxx LLP, counsel for the
Company for matters relating to
New York law, dated as of such Closing
21
Date, to be provided in form and substance reasonably acceptable to the
Initial Purchasers, and a reliance letter to the Initial Purchasers for
such firm's opinion given in connection with the Convertible Debentures
offering and the Senior Credit Facilities transaction; and (iv) Xxxxxx
Xxxxxxx Xxxxxx & Xxxxxxx, LLC, counsel to the Company for matters relating
to Massachusetts law, dated as of such Closing Date, to be provided in form
and substance reasonably acceptable to the Initial Purchasers, and a
reliance letter to the Initial Purchasers for such firm's opinion given in
connection with the Convertible Debentures offering and the Senior Credit
Facilities transaction.
(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date
the Initial Purchasers shall have received the favorable opinion of Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, counsel for the Initial Purchasers,
dated as of such Closing Date, with respect to such matters as may be
reasonably requested by the Initial Purchasers.
(e) Officers' Certificate. On each of the Closing Date and any
Subsequent Closing Date, the Initial Purchasers shall have received a
written certificate executed by the Chairman of the Board, Chief Executive
Officer or President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company and a President or Vice President
of each Subsidiary Guarantor, dated as of such Closing Date, to the effect
set forth in Section 5(b)(ii) hereof, and further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to the Closing Date there has not occurred any Material Adverse
Change;
(ii) the representations and warranties of the Company and the
Subsidiary Guarantors set forth in Section 1 hereof were true and
correct as of the Time of Execution and are true and correct as of the
Closing Date with the same force and effect as though expressly made
on and as of the Closing Date; and
(iii) the Company and the Subsidiary Guarantors have complied
with all the agreements and satisfied all the conditions on their part
to be performed or satisfied at or prior to the Closing Date.
(f) Chief Financial Officer's Certificate. On the Closing Date the
Initial Purchasers shall have received a written certificate executed by
the Chief Financial Officer or Chief Accounting Officer of the Company,
dated as of the Closing Date, as to certain agreed upon financial matters.
(g) PORTAL Listing. At the Closing Date the Securities shall have been
designated for trading on the PORTAL Market.
(h) Registration Rights Agreement and Indenture. The Company and the
Subsidiary Guarantors shall have entered into the Registration Rights
Agreement and the Indenture, the Trustee shall have entered into the
Indenture and the Initial Purchasers shall have received executed
counterparts thereof.
22
(i) Concurrent Transactions. The Senior Credit Facilities will have
been entered into, the Convertible Debentures will have been issued, and
substantially all outstanding debt of the issuer will have been refinanced
pursuant to the Recapitalization, concurrently with the consummation of the
offering of the Securities in the amounts and on the terms and conditions
described in the Pricing Disclosure Package and reasonably acceptable to
the Initial Purchasers.
(j) Additional Documents. On or before the Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of
any of the representations and warranties, or the satisfaction of any of
the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8, Section 9 and Section
13 shall at all times be effective and shall survive such termination.
SECTION 6. Reimbursement of Initial Purchasers' Expenses. If this Agreement
is terminated by the Initial Purchasers pursuant to Section 5 or 10 hereof,
including if the sale to the Initial Purchasers of the Securities on the Closing
Date is not consummated because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or to comply with any provision
hereof other than by reason of a default by any of the Initial Purchasers, the
Company agrees to reimburse the Initial Purchasers (or such Initial Purchasers
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket costs and expenses that shall have been reasonably
incurred by the Initial Purchasers in connection with the proposed purchase and
the offering and sale of the Securities, including, without limitation,
reasonable fees and disbursements of counsel for the preparation of the
Commitment Letter and due diligence undertaken in relation to the
Recapitalization, printing, shipping, mailing and all other expenses related to
the production of the Pricing Disclosure Package and Final Offering Memorandum,
and 50% of the expenses associated with the chartered airplane used on the road
show for the marketing of the Securities.
SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial
Purchasers, on the one hand, and the Company and the Subsidiary Guarantors, on
the other hand, hereby agree to observe the following procedures in connection
with the offer and sale of the Securities:
(A) Offers and sales of the Securities will be made only by the Initial
Purchasers or Affiliates thereof qualified to do so in the jurisdictions in
which such offers or sales are made. Each such offer or sale shall only be made
to persons whom the offeror or seller reasonably believes to be Qualified
Institutional Buyers or non-U.S. persons outside the United States to whom the
offeror or seller reasonably believes offers and sales of the Securities may be
made in reliance upon Regulation S.
23
(B) The Securities will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising (within the meaning of Rule 502 under the Securities Act) will be
used in the United States in connection with the offering of the Securities.
(C) Upon original issuance by the Company, and until such time as the same
is no longer required under the applicable requirements of the Securities Act,
the Notes (and all securities issued in exchange therefor or in substitution
thereof, other than the Exchange Notes) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (c) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF APPLICABLE) OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS),
(2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
24
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE
SECURITY EVIDENCED HEREBY."
Following the sale of the Securities by the Initial Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers shall
not be liable or responsible to the Company or any Subsidiary Guarantor for any
losses, damages or liabilities suffered or incurred by the Company or any
Subsidiary Guarantor, including any losses, damages or liabilities under the
Securities Act, arising from or relating to any resale or transfer of any
Security.
SECTION 8. Indemnification.
(a) Indemnification of the Initial Purchasers. Each of the Company and
the Subsidiary Guarantors, jointly and severally, agrees to indemnify and
hold harmless each Initial Purchaser, its directors, officers and
employees, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such
Initial Purchaser, director, officer, employee or controlling person may
become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Pricing Disclosure
Package, the Final Offering Memorandum, the Company's Current Report on
Form 8-K furnished to/filed with the Commission on February 1, 2007, the
roadshow relating to the Securities prepared by the Company as available on
xxx.xxxxxxxxxxx.xxx on the date hereof, or any other written information
prepared and used by the Company in connection with the offer or sale of
the Securities (or any amendment or supplement to the foregoing), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and to reimburse each Initial
Purchaser and each such director, officer, employee or controlling person
for any and all expenses (including the fees and disbursements of counsel
chosen by each Initial Purchaser) as such expenses are reasonably incurred
by such Initial Purchaser or such director, officer, employee or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but
only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company by
the Initial Purchasers expressly for use in the Pricing Disclosure Package
or the Final Offering Memorandum (or any amendment or supplement thereto).
The indemnity agreement set forth in this Section 8(a) shall be in addition
to any liabilities that the Company and the Subsidiary Guarantors may
otherwise have.
(b) Indemnification of the Company and the Subsidiary Guarantors. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
25
harmless the Company, each Subsidiary Guarantor, each of their respective
directors, and each person, if any, who controls the Company or any
Subsidiary Guarantor within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, any Subsidiary Guarantor or any such
director or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Initial Purchaser), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of
or is based upon any untrue statement or alleged untrue statement of a
material fact contained in the Pricing Disclosure Package or the Final
Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Pricing Disclosure Package
or the Final Offering Memorandum (or any amendment or supplement thereto),
in reliance upon and in conformity with written information furnished to
the Company by the Initial Purchasers expressly for use therein; and to
reimburse the Company, any Subsidiary Guarantor and each such director or
controlling person for any and all expenses (including the fees and
disbursements of counsel) as such expenses are reasonably incurred by the
Company, any Subsidiary Guarantor or such director or controlling person in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action. Each of the
Company and the Subsidiary Guarantors hereby acknowledges that the only
information that the Initial Purchasers have furnished to the Company
expressly for use in the Pricing Disclosure Package or the Final Offering
Memorandum (or any amendment or supplement thereto) are (i) the statements
set forth in the sentence directly above the words "Sole Book-Running
Manager" of the cover page regarding delivery of the Notes and (ii) under
the heading "Plan of Distribution", (A) the fourth, fifth, sixth and
seventh sentences in the sixth paragraph beneath the table related to
market-making activities and (B) the eighth paragraph beneath the table
related to stabilization, syndicate covering transactions and penalty bids.
The indemnity agreement set forth in this Section 8(b) shall be in addition
to any liabilities that each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained
in this Section 8 or to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice
26
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying parties (Banc of America Securities
LLC in the case of Sections 8(b) and 9 hereof), representing the
indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying
party.
(d) Settlements. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent to
the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been
a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent (i)
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include any statements as to or any findings
of fault, culpability or failure to act by or on behalf of any indemnified
party.
27
SECTION 9. Contribution. If the indemnification provided for in Section 8
hereof is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Subsidiary Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, from the offering of
the Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Subsidiary Guarantors,
on the one hand, and the Initial Purchasers, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Subsidiary Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, in connection with
the offering of the Securities pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total discount received by the Initial
Purchasers bear to the aggregate initial offering price of the Securities. The
relative fault of the Company and the Subsidiary Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Subsidiary Guarantors, on the one
hand, or the Initial Purchasers, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or inaccuracy.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8 hereof, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.
The Company, the Subsidiary Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 9.
Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the discount received by
such Initial Purchaser in connection with the Securities distributed by it. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers'
28
obligations to contribute pursuant to this Section 9 are several, and not joint,
in proportion to their respective commitments as set forth opposite their names
in Schedule A. For purposes of this Section 9, each director, officer and
employee of an Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as such Initial Purchaser, and each
director of the Company or any Subsidiary Guarantor, and each person, if any,
who controls the Company or any Subsidiary Guarantor within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company and the Subsidiary Guarantors.
SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Initial Purchasers by notice given to the
Company if at any time: (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
NYSE, or trading in securities generally on either NASDAQ or the NYSE shall have
been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such quotation system or stock exchange by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal,
New York or Ohio authorities; (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Initial Purchasers
is material and adverse and makes it impracticable or inadvisable to proceed
with the offering sale or delivery of the Securities in the manner and on the
terms described in the Pricing Disclosure Package or to enforce contracts for
the sale of securities; (iv) in the judgment of the Initial Purchasers there
shall have occurred any Material Adverse Change; or (v) the Company and its
subsidiaries shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the Initial
Purchasers may interfere materially with the conduct of the business and
operations of the Company and its subsidiaries regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 10 shall
be without liability on the part of (i) the Company or any Subsidiary Guarantor
to any Initial Purchaser, except that the Company and the Subsidiary Guarantors
shall be obligated to reimburse the expenses of the Initial Purchasers pursuant
to Sections 4 and 6 hereof, (ii) any Initial Purchaser to the Company, or (iii)
any party hereto to any other party, except that the provisions of Sections 8
and 9 hereof shall at all times be effective and shall survive such termination.
SECTION 11. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and the Subsidiary Guarantors and of each of their
respective officers and of the several Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Initial Purchaser or the Company
or any of the Subsidiary Guarantors or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder and any termination of
this Agreement.
SECTION 12. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered, couriered or facsimiled and confirmed to the
parties hereto as follows:
29
If to the Initial Purchasers:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxxxx
XxXxxxxx Investments Inc.
Key Tower
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx
BMO Capital Markets Corp.
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
SunTrust Capital Markets, Inc.
000 Xxxxxxxxx Xxxxxx, XX
23rd Floor, MC GA-ATL-3947
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxx Jacob, Esq.
If to the Company or the Subsidiary Guarantors:
Invacare Corporation
Xxx Xxxxxxxx Xxx
X.X. Xxx 0000
Xxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx XxXxxxx, Esq.
General Counsel
30
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxx XXX
0000 XxXxxxxx Xxxxxxxxxx Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Any party hereto may change the address or facsimile number for receipt of
communications by giving written notice to the others.
SECTION 13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 16 hereof, and to the benefit of the indemnified parties
referred to in Sections 8 and 9 hereof, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any Subsequent Purchaser of other purchaser
of the Securities as such from any of the Initial Purchasers merely by reason of
such purchase.
SECTION 14. Partial Unenforceability. The invalidity or unenforceability of
any section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other section, paragraph or provision hereof.
If any section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 15. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES THEREOF.
Any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby ("Related Proceedings") may be
instituted in the federal courts of the United States of America located in the
City and County of
New York or the courts of the State of
New York in each case
located in the City and County of
New York (collectively, the "Specified
Courts"), and each party irrevocably submits to the non-exclusive jurisdiction
(except for suits, actions, or proceedings instituted in regard to the
enforcement of a judgment of any Specified Court in a Related Proceeding, as to
which such jurisdiction is non-exclusive) of the Specified Courts in any Related
Proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
Related Proceeding brought in any Specified Court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any Specified
Proceeding in the Specified Courts and irrevocably and unconditionally waive and
agree not to plead or claim in any Specified Court that any Related Proceeding
brought in any Specified Court has been brought in an inconvenient forum.
31
SECTION 16. Default of One or More of the Several Initial Purchasers. If
any one or more of the several Initial Purchasers shall fail or refuse to
purchase Securities that it or they have agreed to purchase hereunder on the
Closing Date, and the aggregate number of Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
does not exceed 10% of the aggregate number of the Securities to be purchased on
such date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule A bears to the aggregate number of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Initial Purchasers with the consent
of the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on the Closing Date. If any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities and the aggregate number of
Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Sections 4, 6, 8 and 9 hereof shall at all times
be effective and shall survive such termination. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, as the case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Final Offering Memorandum or any other
documents or arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 16. Any action taken under this Section 16 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
SECTION 17. No Advisory or Fiduciary Responsibility. Each of the Company
and the Subsidiary Guarantors acknowledges and agrees that: (i) the purchase and
sale of the Securities pursuant to this Agreement, including the determination
of the offering price of the Securities and any related discounts and
commissions, is an arm's-length commercial transaction between the Company and
the Subsidiary Guarantors, on the one hand, and the several Initial Purchasers,
on the other hand, and the Company and the Subsidiary Guarantors are capable of
evaluating and understanding and understand and accept the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction each Initial Purchaser is and has been acting solely as a
principal and is not the agent or fiduciary of the Company, Subsidiary
Guarantors or their respective affiliates, shareholders, creditors or employees
or any other party; (iii) no Initial Purchaser has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company and the Subsidiary
Guarantors with respect to any of the transactions contemplated hereby or the
process leading thereto (irrespective of whether such Initial Purchaser has
advised or is currently advising the Company or the Subsidiary Guarantors on
other matters) or any other obligation to the Company and the Subsidiary
Guarantors except the obligations expressly set forth in this Agreement; (iv)
the several Initial Purchasers and their respective affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of
the Company and the Subsidiary Guarantors and that the several Initial
32
Purchasers have no obligation to disclose any of such interests by virtue of any
fiduciary or advisory relationship; and (v) the Initial Purchasers have not
provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company and the Subsidiary Guarantors have
consulted their own legal, accounting, regulatory and tax advisors to the extent
they deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether
written or oral) between the Company, the Subsidiary Guarantors and the several
Initial Purchasers, or any of them, with respect to the subject matter hereof.
The Company and the Subsidiary Guarantors hereby waive and release, to the
fullest extent permitted by law, any claims that the Company and the Subsidiary
Guarantors may have against the several Initial Purchasers with respect to any
breach or alleged breach of fiduciary duty.
SECTION 18. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
33
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
INVACARE CORPORATION, an Ohio corporation
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President and COO
[
Purchase Agreement Signature Page]
SUBSIDIARY GUARANTORS
ADAPTIVE SWITCH LABORATORIES, INC.
INVACARE FLORIDA CORPORATION
INVACARE CREDIT CORPORATION
THE AFTERMARKET GROUP, INC.
THE HELIXX GROUP, INC.
CHAMPION MANUFACTURING INC.
HEALTHTECH PRODUCTS, INC.
INVACARE CANADIAN HOLDINGS, INC.
INVACARE INTERNATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
[
Purchase Agreement Signature Page]
KUSCHALL, INC.
ALTIMATE MEDICAL, INC.
INVACARE SUPPLY GROUP, INC.
INVACARE HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
[
Purchase Agreement Signature Page]
FREEDOM DESIGNS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
[
Purchase Agreement Signature Page]
MEDBLOC, INC.
GARDEN CITY MEDICAL INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
Title: Assistant Secretary
[Purchase Agreement Signature Page]
INVACARE FLORIDA HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
[Purchase Agreement Signature Page]
The foregoing Purchase Agreement is hereby confirmed and accepted by the
Initial Purchasers as of the date first above written.
BANC OF AMERICA SECURITIES LLC
KEYBANC CAPITAL MARKETS,
A DIVISION OF MCDONALD INVESTMENTS INC.
BMO CAPITAL MARKETS CORP.
SUNTRUST CAPITAL MARKETS, INC.
By: Banc of America Securities LLC
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Managing Director
[Purchase Agreement Signature Page]
SCHEDULE A
Aggregate Principal
Amount of Securities to
be Purchased
Initial Purchasers
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Banc of America Securities LLC...................................$105,000,000
KeyBanc Capital Markets, a division of
McDonald Investments Inc............ 52,500,000
BMO Capital Markets Corp........................................... 8,750,000
SunTrust Capital Markets, Inc.......................................8,750,000
Total...................................................$175,000,000
Sch A-1
SCHEDULE B
PRICING SUPPLEMENT STRICTLY CONFIDENTIAL
$175,000,000
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Invacare Corporation
9 3/4% Senior Notes due 2015
February 7, 2007
--------------------------------------------------------------------------------
Pricing Supplement dated February 7, 2007 to Preliminary Offering
Memorandum dated January 23, 2007 of
Invacare Corporation
This Pricing Supplement is qualified in its entirety by reference to the
Preliminary Offering Memorandum.
The information in this Pricing Supplement supplements the Preliminary
Offering Memorandum and supersedes the information in the Preliminary Offering
Memorandum to the extent inconsistent with the information in the Preliminary
Offering Memorandum.
The notes have not been registered under the Securities Act of 1933 and are
being offered only to (1) "qualified institutional buyers" as defined in Rule
144A under the Securities Act and (2) outside the United States to non-U.S.
persons in compliance with Regulation S under the Securities Act.
Principal Amount: $175,000,000
Title of Securities: 9 3/4% Senior Notes due 2015
Final Maturity Date: February 15, 2015
Issue Price: 98.642%, plus accrued interest, if any
Coupon: 9 3/4%
Interest Payment Dates: February 15 and August 15
First Interest Payment Date: August 15, 2007
Optional Redemption: After February 15, 2011, the Company may redeem all or a portion of the
Notes, on not less than 30 nor more than 60 days' prior written notice, in
amounts of $1,000 or whole multiples of $1,000 in excess thereof at the
following redemption prices (expressed as percentages of the principal
amount) set forth below, plus accrued and unpaid interest, if any, thereon,
to the applicable redemption date (subject to the rights of holders of
record on relevant record dates to receive interest due on an interest
payment date), if redeemed during the twelve-month period beginning on
February 15th of the years indicated below:
Sch B-1
Year Price
---- -----
2011 104.875%
2012 102.438%
2013 and thereafter 100.000%
At any time prior to February 15, 2011,
the Company also may redeem all or part of
the Notes, upon not less than 30 nor more
than 60 days' written notice, at a
redemption price equal to 100% of the
principal amount of the Notes redeemed
plus the Applicable Premium as of, and
accrued and unpaid interest and additional
interest, if any, up to the redemption
date, subject to the rights of Holders on
the relevant record date to receive
interest due on the relevant interest
payment date.
"Applicable Premium" means, with respect
to a note at any redemption date, the
greater of (i) 1.0% of the principal
amount of such note and (ii) the excess of
(A) the present value at such redemption
date of (1) the redemption price of such
note on February 15, 2011, (such
redemption price being that described in
the first paragraph under "-- Optional
Redemption") plus (2) all required
remaining scheduled interest payments due
on such note through and including
February 15, 2011 (excluding accrued but
unpaid interest to the redemption date),
computed using a discount rate equal to
the Applicable Treasury Rate plus 0.50%,
over (B) the principal amount of such note
on such redemption date, as calculated by
the Company or on behalf of the Company by
such Person as the Company shall
designate; provided that such calculation
shall not be a duty or obligation of the
applicable Trustee.
"Applicable Treasury Rate" means, as of
any redemption date, the yield to maturity
as of such redemption date of United
States Treasury securities with a constant
maturity (as compiled and published in the
most recent Federal Reserve Statistical
Release H.15 (519) that has become
publicly available at least two Business
Days prior to the redemption date (or, if
such Statistical Release is no longer
published, any publicly available source
of similar market data)) most nearly equal
to the period from the redemption date to
February 15, 2011; provided, however that
if the period from the redemption date to
February 15, 2011, is less than one year,
the weekly average yield on actually
traded United States Treasury securities
adjusted to a constant maturity of one
year will be used.
Optional Redemption with Equity In addition, at any time and from time to
Proceeds: time prior to February 15, 2010,the Company
may use the net proceeds of one or more Public
Equity Offeringsto redeem up to an aggregate
of 35% of the aggregate principal amount of
Notes issued under the Indenture (including the
principal amount of any Additional Notes
issued under the Indenture) at a
redemption price equal to 109.750% of the
aggregate principal amount of the Notes
redeemed, plus accrued and un-paid
interest, if any, to the redemption date
(subject to the rights of holders of
record on relevant record dates to receive
interest due on an interest payment date);
provided that this redemption provision
shall not be applicable with respect to
any transaction that results in a Change
of Control. At least 65% of the aggregate
principal amount of Notes (including the
principal amount of any Additional Notes
issued under the Indenture) must remain
outstanding immediately after the
occurrence of such redemption. In order to
effect this redemption, the Company must
deliver a notice of redemption no later
than 30 days after the closing of the
related Public Equity Offering and must
complete such redemption within 60 days of
the closing of the Public Equity Offering.
Change of Control: 101%
Initial Purchasers: Name Principal Amount of Notes
Banc of America Securities LLC $105,000,000
KeyBanc Capital Markets, a division of
McDonald Investments Inc. 52,500,000
BMO Capital Markets Corp. 8,750,000
SunTrust Capital Markets, Inc. 8,750,000
Trade Date: February 7, 2007
Settlement Date: February 12, 2007 (T+3)
Distribution: 144A and Regulation S with registration rights as set forth in the
Preliminary Offering Memorandum
Sch B-3
CUSIP/ISIN Numbers: 144A CUSIP: 000000XX0
144A ISIN: US461203AA98
Regulation S CUSIP: X00000XX0
Regulation S ISIN: USU46083AA61
Use of Proceeds: We will use net proceeds of this offering, together with initial borrowings
under our new senior secured credit facilities and net proceeds of our
offering of $125 million of our 4.125% convertible senior subordinated
debentures (which will have an initial conversion price of approximately
$24.79 per common share), to repay existing indebtedness and pay related
fees and expenses.
Sch B-4
EXHIBIT A
Subsidiaries of
Invacare Corporation
Subsidiary State of Incorporation
Adaptive Switch Laboratories, Inc. Texas
Altimate Medical, Inc. Minnesota
Champion Manufacturing Inc. Delaware
Freedom Designs, Inc. California
Garden City Medical Inc. Delaware
Healthtech Products, Inc. Missouri
The Helixx Group, Inc. Ohio
Invacare Canadian Holdings, Inc. Delaware
Invacare Credit Corporation Ohio
Invacare Florida Corporation Delaware
Invacare Florida Holdings, LLC Delaware
Invacare Holdings, LLC Ohio
Invacare International Corporation Ohio
Invacare Supply Group, Inc. Massachusetts
Kuschall, Inc. Delaware
Medbloc, Inc. Delaware
The Aftermarket Group, Inc. Delaware
A-1
