Exhibit 10.3
SECOND WAIVER AND AMENDMENT AGREEMENT
THIS
SECOND WAIVER AND AMENDMENT AGREEMENT (this "Agreement"),
dated as of
December 15, 2006 is by and among Invacare Corporation (the
"Company"), each
of
the Borrowing
Subsidiaries party to
the Credit Agreement
(as defined
below)
(collectively with the
Company, the
"Borrowers"),
the banks set forth on
the
signature pages
hereof (collectively, the "Banks" and each individually a
"Bank") and JPMorgan Chase Bank, N.A., a national banking
association, as
agent
for the Banks (in such capacity, the "Agent").
RECITALS:
A.
The Borrowers,
the Banks and the
Agent are parties to that certain
Credit Agreement dated as of January 14, 2005 (as amended, restated
or otherwise
modified prior to the date hereof and as amended or otherwise
modified hereby or
from time to time in accordance with the terms hereof and thereof,
the "Credit
Agreement"), including
modifications
pursuant to that certain Waiver and
Amendment Agreement dated as of November 14, 2006 (the "Existing
Waiver"), among
the Borrowers, the Banks and the Agent.
B.
The Company has
previously
entered into separate and several Note
Purchase Agreements,
each dated as of April
27, 2006, between the
Company and
each of the
institutions
identified on Schedule A thereto, as amended by that
certain Waiver
and Amendment, dated as of November 14, 2006 (as amended,
restated or
otherwise modified, the "Existing 2006 NPA Waiver"), to Note
Purchase Agreements
dated as of April 27,
2006 and that certain
Second Waiver
and Amendment to 2006 Note Purchase Agreements dated as of the date hereof
(as
amended, restated or
otherwise modified
from time to time,
the "New 2006 NPA
Waiver"), (as
amended, restated or otherwise modified from time to time,
collectively, the "2006 Note Purchase Agreement"), pursuant to
which the Company
issued and sold its
$150,000,000
6.15% Senior Notes due April 27, 2016 (as
amended, restated,
supplemented, replaced
or otherwise modified hereby or from
time to time, collectively, the "2006 Notes").
C.
The Company has also
previously entered
into separate and several Note
Purchase Agreements, each dated as of February 27, 1998, between
the Company and
each of the
institutions
identified on Schedule A thereto, as amended by that
certain First
Amendment,
dated as of October 1, 2003, to Note Purchase
Agreements dated as of February 27, 1998, that certain Second
Amendment,
dated
as of September 29, 2005, to Note Purchase Agreements dated as of February 27,
1998, that
certain Waiver and Amendment dated as of November 14, 2006 (as
amended, restated or
otherwise modified
from time to time, the
"Existing 1998
NPA Waiver"), to Note Purchase Agreements dated as of February 27,
1998 and that
certain Second Waiver and Amendment to 1998 Note Purchase
Agreements dated as of
the date hereof (as amended, restated or otherwise modified from time to time,
the "New 1998 NPA
Waiver"), (as amended,
restated or otherwise
modified from
time to time,
collectively, the
"1998 Note Purchase
Agreement"), pursuant
to
which the Company issued and sold to the purchasers named on Schedule A thereto
its (i) $80,000,000
6.71% Series A Senior Notes due February 27, 2008 (as
amended, restated,
supplemented,
replaced or otherwise
modified from time
to
time, collectively, the "1998 Notes") and (ii) $20,000,000 6.60%
Series B Senior
Notes due February 27,
2005 (which Series B
Notes have since been paid in full
by the Company).
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D.
The Company has also
previously entered
into separate and several Note
Purchase Agreements,
each dated as of
October 1, 2003, between the Company and
each of the
institutions
identified on Schedule A thereto, as amended by that
certain First
Amendment,
dated as of
September 29, 2005, to Note Purchase
Agreement dated as of
October 1, 2003, that
certain Waiver and Amendment dated
as of November 14, 2006 (as amended, restated or otherwise modified
from time to
time, the "Existing 2003 NPA Waiver"), to Note Purchase Agreements dated as of
October 1, 2003 and
that certain
Second Waiver and Amendment to 2003 Note
Purchase Agreements
dated as of the
date hereof (as amended, restated or
otherwise
modified from
time to time, the "New 2003 NPA Waiver" and,
collectively with the New 2006 NPA Waiver and the New 1998 NPA
Waiver, the "New
NPA Waivers"), (as
amended, restated or
otherwise modified
from time to time,
collectively, the "2003 Note Purchase Agreement"), pursuant to
which the Company
issued and
sold to the purchasers named on Schedule A thereto its (i)
$50,000,000 3.97%
Series A Senior Notes due October 1, 2007, (ii) $30,000,000
4.74% Series B Senior
Notes due October 1, 2009, and (iii) $20,000,000 5.05%
Series C Senior Notes
due October 1, 2010 (all of such notes, as amended,
restated,
supplemented, replaced
or otherwise modified from time to time,
collectively, the "2003 Notes").
E.
The Company is also a
party to (i) that
certain Receivables
Purchase
Agreement, dated as of
September 30, 2005, among the Company, as Servicer,
Invacare Receivables
Corporation,
as Seller, Park Avenue
Receivables Company,
LLC and JPMorgan
Chase Bank, N.A., as Agent, and the purchasers named on
Schedule A thereto
(the "Securitization
Lenders") as amended by that certain
Amendment No. 1 to
Receivables Purchase
Agreement,
dated as of September
28,
2006 and that certain Omnibus Waiver, Amendment and Reaffirmation
of Performance
Undertaking dated
as of November 14, 2006 (the "Existing Securitization
Waiver"), and that certain Second Omnibus Waiver, Amendment and
Reaffirmation of
Performance
Undertaking dated as
of the date hereof
(the "New
Securitization
Waiver", and
together with the New NPA Waivers, the "Other December 2006
Waivers"), (as
amended, restated or
otherwise modified
from time to time, the
"Securitization
Purchase Agreement"),
(ii)
that certain Receivables Sale
Agreement, dated
as of September 30, 2005, among the Company, Invacare
Receivables
Corporation,
Healthtech Products,
Inc. and Invacare Supply Group,
Inc. as amended by the Existing Securitization Waiver and the New
Securitization
Waiver (as amended,
restated or otherwise modified from time to time, the
"Securitization Sale Agreement") and (iii) that certain Performance
Undertaking,
dated as of September 30, 2005, in favor of Invacare Receivables
Corporation (as
amended, restated or
otherwise modified
from time to time,
the "Performance
Undertaking", and
together with the Securitization Sale Agreement and the
Securitization
Purchase Agreement,
the "Securitization Documents", and the
Securitization
Documents, together
with the 2006 Note Purchase Agreement, the
1998 Note Purchase Agreement, the 2003 Note Purchase
Agreement,
collectively,
the "Other Primary
Loan Agreements",
and the Other
Primary Loan
Agreements,
together with the Credit Agreement, collectively, the "Primary Loan
Agreements"
and the Primary Loan Agreements, together with the other
agreements,
documents
and instruments
entered into in connection therewith or pursuant thereto,
collectively, the "Primary Loan Documents").
F.
Pursuant to (i) the
Existing Waiver, the Banks have agreed to
waive,
through December 15, 2006 (subject to the terms and conditions
thereof) certain
Existing Defaults (as defined in the Existing Waiver) that
otherwise would exist
and be continuing under the Credit Agreement, (ii) the Existing
2006 NPA Waiver,
the holders of the
2006 Notes (the "2006
Noteholders") have
agreed to waive,
through December 15, 2006, certain defaults and events of default
under the 2006
2
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Note Purchase
Agreement (iii) the Existing 1998 NPA Waiver, the holders of the
1998 Notes (the "1998
Noteholders") have agreed to waive, through December 15,
2006, certain
defaults and events of default under the 1998 Note Purchase
Agreement, (iv) the Existing 2003 NPA Waiver, the holders of the
2003 Notes (the
"2003 Noteholders")
have agreed to waive,
through December 15,
2006, certain
defaults and events of default under the 2003 Note Purchase
Agreement,
and (v)
the Existing
Securitization Waiver,
the Securitization
Lenders have agreed to
waive, through
December 15, 2006, certain "Termination Events" and "Potential
Termination Events"
under (and as defined in) the Securitization Sale Agreement
and certain "Amortization Events" and "Potential Amortization
Events" under (and
as defined in) the
Securitization
Purchase Agreement
(all of such events, the
"Existing
Securitization Defaults" and together with any other such events
from
time to time existing under such documents, the "Securitization
Defaults").
G.
The Company has requested that the Banks agree to extend the
waivers of
the Existing Defaults
under the Credit
Agreement which were provided under the
Existing Waiver and
also waive any Default
caused by a breach of the financial
covenants set forth in
Sections 5.2(a) and
5.2(c) of the Credit
Agreement for
the fiscal quarter ending December 31, 2006, and the Banks
signatory hereto
are
agreeable to such request, solely on the terms and conditions set
forth herein.
H.
The Company has likewise requested that (i) the 2006
Noteholders agree
to extend the waivers of the defaults and events of default
under the 2006
Note
Purchase Agreement
pursuant to the terms
of the New 2006 NPA Waiver, (ii) the
1998 Noteholders
agree to extend
the waivers of the defaults and events of
default under the 1998 Note Purchase Agreement pursuant to the terms of
the New
1998 NPA Waiver, (iii)
the 2003 Noteholders
agree to extend the waivers of the
defaults and events of default under the 2003 Note Purchase
Agreement pursuant
to the terms of the New 2003 NPA Waiver, and (iv) the Securitization Lenders
agree to extend the Existing Securitization Defaults under the Securitization
Documents pursuant to the terms of the New Securitization
Waiver.
I.
All requirements of law have been fully complied with and all other
acts
and things
necessary to make this Agreement a valid, legal, and binding
instrument according
to its terms for the purposes herein expressed have been
done or performed.
NOW,
THEREFORE, upon the
full and complete
satisfaction of the conditions
precedent to the
effectiveness of this Agreement, and in consideration of good
and valuable
consideration,
the receipt and sufficiency of which is hereby
acknowledged, the Borrowers and the Banks do hereby agree as
follows:
SECTION 1. Temporary Waivers.
1.1
Each Borrower hereby
acknowledges and
agrees that, as a result of the
Existing Defaults
under the Credit Agreement, the Banks may, on or after
December 15,
2006, if they so elect, proceed to enforce their rights and
remedies under and in
accordance with the
Loan Documents,
including without
limitation to collect the Borrowers' obligations to the Banks.
1.2
(a) Subject to the terms and conditions of this Agreement, the Banks
agree to temporarily
waive (the "Waiver") the Existing Defaults and any Default
that may occur due to
a breach of Sections
5.2(a) or 5.2(c) for the fiscal
quarter ending December 31, 2006 (the "Waived Defaults") during the period
(the
3
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"Waiver Period")
commencing on the date
hereof and expiring on the earliest to
occur of (A) January 31, 2007, unless such date has been
automatically
extended
to February 15, 2007 as provided in Section 1.2(b) below (the "Outside Waiver
Termination Date"),
(B) any Default or Event of Default under any Loan Document
other than the Waived Defaults, (C) the breach or nonperformance
by the Company
or any Subsidiary
of any covenant, agreement or condition
set forth in this
Agreement or the Other December 2006 Waivers, (iv) any breach of,
default, event
of default or Securitization Default under any Other Primary
Loan Agreement (or
any amendment
or waiver with respect thereto) or any termination or other
expiration of the
waiver period set
forth in the Other
December 2006 Waivers,
and (D) the date on which any representation or warranty in Section 4 hereof
fails to be true and correct.
(b)
The Outside Waiver
Termination Date shall
be automatically
extended
from January 31, 2007 to February 15, 2007, without notice or any other
action,
if (i) on or prior to December 22, 2006, the Company has provided the Agent
and
each of the Bank with a fully executed commitment letter or letters (as
amended
or otherwise modified from time to time, collectively, the
"Commitment Letters")
providing fully
underwritten
commitments from one or more reputable financial
institutions and/or institutional investors to provide financing to
the Company
in an aggregate amount sufficient to pay in full all outstanding
obligations of
the Company and its Subsidiaries under the Primary Loan Documents
on or prior to
February 15, 2007, in form and substance satisfactory to the Required Banks
and
the "Required
Holders" (as defined in the Note Purchase Agreements) in
accordance with each
of the New NPA Waivers, and (ii) the waiver period under
each of the Other
December 2006 Waivers has likewise been (or shall be,
concurrently with the
extension of the Waiver Period) extended to February 15,
2007 on terms and
conditions
satisfactory to the
Required Banks; provided,
however if on or prior to January 31, 2007, (x) any of the
Commitment Letters is
terminated (unless the commitments under the remaining Commitment
Letters, after
giving effect to such
termination and any
new Commitment Letter
or Commitment
Letters entered into by the Company in replacement of such
terminated Commitment
Letter and
delivered to the Agent and each of the Banks prior to such
termination, are
sufficient to pay in full all outstanding obligations of the
Company and its
Subsidiaries under the
Primary Loan
Documents on or prior
to
February 15, 2007) or (y) the waiver period under any of the Other
December 2006
Waivers shall have
reverted to January
31, 2007 then,
in any such case,
the
Outside Waiver
Termination
Date shall revert to
January 31, 2007;
provided,
further that if any of the events described in the foregoing
clauses (x) or (y)
occurs after
January 31, 2007, the Waiver Period shall expire as of the
occurrence of such event without notice or any further action.
1.3
The Waiver shall be effective only for the Waived Defaults and only
for
the Waiver Period, and such Waiver shall not entitle the Borrowers
to any future
waiver in similar or other circumstances and shall automatically cease to be
effective upon the
expiration of the
Waiver Period,
without notice or other
action of any kind by the Agent or the Banks. The Agent and the Banks
reserve
their respective
rights, in their
discretion, to
exercise any or all of their
rights and remedies under the Loan Documents as a result of the
Waived Defaults
upon the expiration of the Waiver Period. Without limiting the foregoing,
upon
the expiration
of the Waiver
Period, a Default will exist under the Credit
Agreement and the Agent shall, upon the request of the Required
Banks, without
the need for the
expiration of grace
periods, if any, in
connection with
the
Waived Defaults
(but otherwise in accordance with the terms of the Credit
Agreement), accelerate
the payment in full of the obligations owed to the Agent
and the Banks under the Loan Documents, and enforce and exercise a
