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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
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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
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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 Docu
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