Exhibit 10.5
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INVACARE CORPORATION
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SECOND WAIVER AND AMENDMENT
Dated as of December 15, 2006
to
NOTE PURCHASE AGREEMENTS
Dated as of April 27, 2006
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Re: $150,000,000 6.15% Senior Notes due April 27, 2016
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SECOND WAIVER AND AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS
SECOND WAIVER AND AMENDMENT, dated as of December 15, 2006 (this
"Waiver and
Amendment") to the
separate and several Note Purchase Agreements
dated as of April 27, 2006, is between INVACARE CORPORATION, an
Ohio corporation
(the "Company"),
and each of the
institutions
which is a
signatory to this
Waiver and is a Noteholder referred to below.
RECITALS:
A.
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
(together with
their
successors and
assigns, each a "Noteholder," and, collectively, the
"Noteholders"), as
amended by that certain Waiver and Amendment, dated as of
November 14, 2006 (as amended, restated or otherwise modified, the
"Existing NPA
Waiver"), to Note
Purchase Agreements
dated as of April 27,
2006 (as amended,
restated or
otherwise modified from time to time, collectively, the "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
"Notes"). The Noteholders are the holders of all of the
outstanding principal amount of the Notes.
B.
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, to
Note
Purchase Agreements
dated as of
February 27, 1998 (as amended, restated or
otherwise modified from time to time, the "Existing 1998 NPA
Waiver"), and that
certain Second
Waiver and Amendment, dated as of the date hereof, to Note
Purchase Agreements
dated as of
February 27, 1998 (as amended, restated or
otherwise modified
from time to time,
the "New 1998 NPA
Waiver") (such Note
Purchase Agreements,
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).
C.
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, to Note Purchase Agreements dated as of
October 1, 2003
(as amended, restated
or otherwise modified
from time to time,
the "Existing
<page>
2003 NPA Waiver"), and that certain Second Waiver and Amendment,
dated as of the
date hereof,
to Note Purchase Agreements dated as of October 1, 2003 ,(as
amended, restated or
otherwise modified
from time to time,
the "New 2003 NPA
Waiver") (such Note
Purchase Agreements, 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").
D.
The Company
has also previously entered into that certain Credit
Agreement dated as of
January 14, 2005, among the Company, the Borrowing
Subsidiaries (as
defined therein),
JPMorgan Chase Bank, N.A., as agent (the
"Agent"), and the
other bank lenders party thereto (the "Banks"), as amended by
that certain Letter
Agreement, dated as of
March 31, 2005, that
certain First
Amendment to Credit Agreement, dated as of August 12, 2005, that
certain Second
Amendment to Credit
Agreement, dated as of
March 31, 2006, that certain Waiver
and Amendment Agreement, dated as of November 14, 2006 (as
amended, restated or
otherwise modified
from time to time, the
"Existing Bank
Waiver"), and that
certain Second Waiver and Amendment Agreement (as amended, restated
or otherwise
modified from time to time, the "New Bank Waiver"), dated as of the date hereof
(as amended, restated
or otherwise modified from time to time, the "Bank Credit
Agreement").
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 (as amended, restated or otherwise
modified from time to time, the "Existing Securitization Waiver"), and that
certain Second
Omnibus Waiver, Amendment and Reaffirmation of Performance
Undertaking, dated as
of the date hereof (as
amended, restated
or otherwise
modified from time to time, the "New Securitization Waiver", and together with
the New 1998 NPA Waiver, the New 2003 NPA Waiver and the
New Bank Waiver,
the
"Other December 2006 Waivers") (such Receivables Purchase
Agreement, 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
1998 Note Purchase
Agreement,
the 2003 Note
Purchase Agreement and the Bank
Credit Agreement,
collectively, the
"Other Primary Loan
Agreements", and
the
Other Primary
Loan Agreements, together with the Note Purchase Agreement,
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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 NPA Waiver, the Noteholders have agreed to
waive, through
December 15, 2006 (subject to the terms and conditions thereof)
certain Defaults
and Events of Default that otherwise would exist and be
continuing under
the Note Purchase Agreements and which are set forth on
Schedule A attached hereto (collectively, the "Existing Defaults"), (ii) 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,
(iii) 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, (iv) the Existing Bank Waiver, the
Banks have
agreed to waive,
through December
15, 2006, certain defaults and events of
default under the Bank
Credit 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 Noteholders agree to extend the
waivers of the Existing Defaults under the Note Purchase Agreement, and the
Noteholders are
agreeable to such request, solely on the terms and
conditions
set forth herein,
including, without
limitation, the
amendments described
in
Section 2 hereof.
H.
The Company has likewise requested that (i) 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, (ii) 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, (iii) the Banks agree to extend the waivers of the
defaults and
events of default under the Bank Credit Agreement (and waive any
new defaults or
events of default
thereunder) pursuant
to the terms of the New Bank Waiver and
(iv) the
Securitization Lenders
agree to extend the
waivers of 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
Waiver and
Amendment 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 Waiver and Amendment set
forth in Section
3
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4 hereof, and in
consideration of good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Company and
the undersigned
Noteholders do hereby agree as follows:
SECTION 1. TEMPORARY WAIVER.
(a)
The Company
acknowledges and
agrees that, as a result of the Existing
Defaults under the Note Purchase Agreement, the Noteholders may, on or after
December 15, 2006, if they so elect, proceed to enforce their
respective rights
and remedies
under the Note Purchase Agreement to collect the Company's
obligations thereunder.
(b)
Subject to the terms and conditions of this Waiver and Amendment, the
Noteholders hereby agree to temporarily waive (collectively,
the "Waivers") the
Existing Defaults
during the period (the
"Waiver Period")
commencing
on the
Effective Date and
expiring on the
earliest to occur of
(i) January 31, 2007,
unless such
date has been
automatically
extended to February 15, 2007 as
provided in Section 1(c) below (the "Outside Waiver Termination
Date"), (ii) any
Default or Event of
Default under the Note Purchase Agreement (including,
without limitation,
any Default or Event of Default arising out of a failure to
comply with any
term, covenant or condition of the Existing NPA Waiver,
including
Section 5 thereof as amended hereby), (iii) the breach or
nonperformance by the
Company or any
Subsidiary of any covenant, agreement or
condition set forth in
this Waiver and
Amendment 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 (v) the date on which any
representation
or warranty in Section 3 hereof fails to be true and correct.
(c)
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
each of the
Noteholders 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 Holders
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 Holders;
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 each of the
Noteholders 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
4
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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.
(d)
The waiver
contemplated in this
Section 1 shall be effective only for
the Existing Defaults and only for the Waiver Period, and such waiver shall not
entitle the Company 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 Noteholders.
Such
waiver shall not prejudice or constitute a waiver of any right or
remedies which
any Noteholder
may have or be
entitled to with
respect to any other breach of
any provision
of any of the Note Purchase Agreement or the Notes. The
Noteholders reserve
their respective
rights, in their discretion, to exercise
any or all of their rights and remedies under the Note Purchase Agreement and
Notes as a result of the Existing Defaults upon the expiration of the Waiver
Period. Without
limiting the foregoing, upon the expiration of the Waiver
Period, an Event of
Default will
continue to exist under the Note Purchase
Agreement, and the Noteholders may, without the need for the
expiration of grace
periods, if any, in
connection with the
Existing Defaults
(but otherwise in
accordance with the
terms of the Note Purchase Agreement), accelerate the
payment in full of the
obligations
owed to the
Noteholders
under the Note
Purchase Agreement
and Notes, and enforce and exercise any or all of the
Noteholders' rights
under or in respect of the Note Purchase Agreement and the
Notes and under applicable law.
(e)
For avoidance of doubt, it is hereby acknowledged and agreed to by
the
Company that the addition of the agreements and covenants in Section 5 hereof
and their continuance
beyond the Waiver
Period are not to be
construed as an
acquiescence or waiver of the Existing Defaults beyond the Waiver
Period but are
added for additional
protection of the Noteholders, and the Noteholders shall
retain all their
rights and remedies
under or in respect of the Note Purchase
Agreement and Notes
and under applicable law with respect to the Existing
Defaults upon the expiration or termination of the Waiver
Period.
SECTION 2. AMENDMENTS.
Section 2.1. Amendment and Restatement of the Notes.
(a) Amendment
and Restatement. Each Note is hereby, without any
further action
required on the part of any Person, deemed to be
automatically amended
to conform to and have the terms provided in Exhibit
2.1(a) to this Agreement (except that the principal amount and the
payee of
each
such Note shall remain
unchanged).
Any Note issued on or after the
Effective Date shall
be in the form of Exhibit 2.1(a) to this Waiver and
Amendment.
(b) Replacement Notes. Upon the request of any Noteholder, the
Company
will
issue a replacement
Note or Notes
(consistent with the terms hereof)
in
favor of such
Noteholder in the
appropriate
form in exchange for
the
Note
or Notes of such
Noteholder delivered
to the Company at the
time of
such
exchange.
Section 2.2. Amendments of Existing NPA Waiver.
5
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(a)
Section 5 of the Existing NPA Waiver is hereby amended by
deleting
the
phrase "and continuing
through April 15, 2007" in the third and fourth
lines thereof.
(b) Section
5(b) of the
Existing NPA Waiver is hereby amended and
restated in its entirety to read as follows:
"(b) the Company will not, and will not permit any of its
Subsidiaries to, at
any time, directly
or indirectly (i) create,
incur, assume, guarantee, or otherwise become liable in respect of
(A)
any Debt of the
Company other
than Debt incurred under the Credit
Agreement, (B) any Debt of Subsidiaries other than Debt incurred
under
the Credit
Agreement by Subsidiaries that are party to the Credit
Agreement as of
December 15, 2006 and (C) any Securitization except
that one or more Special Purpose Subsidiaries that are party to the
Securitization
Documents as of December 15, 2006 may become liable in
respect of
a Permitted Receivables Securitization Program not
exceeding $75,401,750
(not including
obligations in respect of fees,
expenses, indemnities
and other reimbursement obligations permitted
under such
Permitted Receivables Securitization Program) in the
aggregate at any time
and (ii) create,
incur, assume or suffer to
exist, any Lien
securing any Debt of the Company or any Subsidiary or
any Lien created, incurred, assumed or otherwise existing with
respect
to any Securitization,
except Liens incurred on receivables, related
assets and collections
of the Company or any Subsidiary in connection
with such assets being
transferred to a
Special Purpose
Subsidiary
pursuant to
a Permitted Receivables Securitization Program as
permitted in accordance with Section 5(f) of this Waiver;
as used in
this Section 5(b),
"Securitization"
means one or more
transactions
wherein the Company and/or a Subsidiary transfers receivables,
related
assets and collections
of the Company
and/or such
Subsidiary
to a
special purpose Subsidiary which issues or incurs indebtedness
secured
by such receivables and all of its other assets;"
(c) Section
5(i) of the
Existing NPA Waiver is hereby amended and
restated in its entirety to read as follows:
"(i) the Company will not, and will not permit any Subsidiary
to,
(x) enter into any
agreement restricting
the ability of the
Company
and its Subsidiaries to amend or modify the Note Purchase Agreement
or
Notes or any document or instrument executed in connection
therewith,
except as set
forth in the waiver/amendment to the Bank Credit
Agreement referred
to in Section
3(c) hereof or (y) enter into any
agreement or
arrangement requiring
any defeasance of the Bank Credit
Agreement; and"
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To
induce the Noteholders
to execute and deliver this Waiver and Amendment
(which representations
shall survive the
execution and delivery of this Waiver
and Amendment), the Company represents and warrants to the
Noteholders that:
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(a)
this Waiver
and Amendment has been duly authorized, executed and
delivered by it and this Waiver and Amendment constitutes the legal,
valid and
binding obligation, contract and agreement of the Company
enforceable against it
in accordance
with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable
principles relating to or limiting creditors' rights generally;
(b)
the Note Purchase Agreement, as modified by this Waiver and
Amendment,
constitutes the legal, valid, and binding obligations, contracts,
and agreements
of the Company enforceable against it in accordance with their
respective terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization,
moratorium, or similar
laws or equitable principles relating to or limiting
creditors' rights generally;
(c)
the execution,
delivery and
performance by the Company of this Waiver
and Amendment (i) has been duly auth
