Exhibit 10.1
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INVACARE CORPORATION
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WAIVER AND AMENDMENT
Dated as of November 14, 2006
to
NOTE PURCHASE AGREEMENTS
Dated as of February 27, 1998
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Re: $80,000,000 6.71% Series A Senior Notes due February 27,
2008
and
$20,000,000 6.60% Series B Senior Notes due February 27, 2005
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WAIVER AND AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS
WAIVER AND AMENDMENT dated as of November 14, 2006 (the or this
"Waiver"), to the
separate and several
Note Purchase
Agreements
dated as of
February 27, 1998, 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 February 27, 1998, 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 pursuant to that certain First Amendment dated as of
October 1, 2003 and as further amended pursuant to that certain
Second Amendment
dated as of September
29, 2005 (said Note
Purchase Agreements,
as heretofore
amended, collectively,
the "Note Purchase
Agreement"),
pursuant to which
the
Company issued and
sold its (i)
$80,000,000 6.71%
Series A Senior
Notes due
February 27, 2008 (the
"Series A Notes") and
(ii) $20,000,000
6.60% Series B
Senior Notes due
February 27, 2005 (the
"Series B Notes"). The
Series B Notes
were paid in full on February 27, 2005. The Noteholders are the holders of the
outstanding principal
amount of the Series A
Notes identified on the signature
pages hereto.
B.
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 (said Note Purchase
Agreements, as
heretofore
amended, collectively, the "2003 Note Purchase
Agreement"), pursuant
to which the Company
issued 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 (collectively, the "2003 Notes").
C.
The Company has also
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 (said Note Purchase
Agreements, collectively, the "2006 Note Purchase Agreement"),
pursuant to which
the Company issued its
$150,000,000 6.15%
Senior Notes due April 27, 2016 (the
"2006 Notes").
D.
The Company
has also previously entered into that certain Credit
Agreement dated as of January 14, 2005 (the "Bank Credit
Agreement"), among
the
Company, certain
Borrowing Subsidiaries
(as defined therein),
the banks named
therein (the
"Banks"), JPMorgan Chase Bank, N.A., as agent (the "Agent"),
Keybank National Association as Syndication Agent, J.P. Morgan
Securities, Inc.
and Keybank National
Association as Co-Lead
Arrangers,
pursuant to which
the
Banks agreed to make term loans and extend a credit facility to the Company and
the Borrowing Subsidiaries.
E.
The Company has requested that the Noteholders temporarily waive its
non-compliance with
Sections 7.1(d) and 11.3 of the Note Purchase Agreement and
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the Events of Default that have occurred and are continuing
under Section
12(c)
as a result of such non-compliance.
F.
In furtherance of the
foregoing, the Company
and the Noteholders
now
desire to set
forth their agreement with respect to (i) the Noteholders'
temporary waiver of the Company's non-compliance and resulting
Events of Default
under the Note Purchase Agreement as described in Recital
E above, and (ii) the
amendments to the Note Purchase Agreement as set forth in Section
5 hereof, in
each case, in the respects, but only in the respects, hereinafter
set forth.
G.
Capitalized
terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreement, as waived hereby,
unless herein
defined or the context shall otherwise require.
H.
All requirements of law have been fully complied with and all other
acts
and things necessary to make this Waiver 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 set forth in Section
3 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.
The
Company has advised the Noteholders that it is not currently and has
not been in compliance
with Sections 7.1(d) and 11.3 of the Note Purchase
Agreement, and as a
result of such
non-compliance there
have occurred and are
continuing Events of Default under Section 12(c) of the Note
Purchase Agreement
(such non-compliance
and resulting Events of Default are collectively referred
to herein as the "Existing Defaults"). On the Waiver Effective Date (as
defined
in Section 3 below), the undersigned Noteholders hereby temporarily
waive, as of
the date hereof and
continuing through
December 15, 2006,
compliance
by the
Company with, and the
Events of Default
occurring as a result of the Company's
failure to be in compliance with, Sections 7.1(d) and 11.3 of the
Note Purchase
Agreement, provided,
however, this
temporary waiver shall only be effective so
long as from the date of this Waiver and continuing through December 15, 2006
(the "Waiver Period"),
the Company shall be
in compliance in all respects with
the terms and
conditions of Section
5 hereof. The
failure of the
Company to
comply with its
agreements
in Section 5 of this Waiver shall be deemed an
automatic Event of
Default under Section
12(c) of the Note Purchase Agreement
(as of the date the Existing Defaults originally occurred) and a rescission of
the temporary
waiver in this
Section 1, in each
case, without
any notice or
other action on behalf of the Noteholders. The temporary waiver of the
Existing
Defaults is
limited to the specific instances of failure to comply and the
resulting Events of
Default which are described above and shall not be deemed a
waiver of or consent to any other failure to comply with the terms of Sections
7.1(d) or 11.3 of the Note Purchase Agreement or any other
provisions
of the
Note Purchase Agreement. Such waiver shall not prejudice or
constitute a waiver
of any right or remedies which the Noteholders may have or be entitled to
with
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respect to any other breach of Sections 7.1(d) or 11.3 or any other
provision of
the Note Purchase Agreement.
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.
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
Series A 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 Series A Notes,
and enforce and
exercise any or all of
the Noteholders'
rights under or in respect of the Note Purchase Agreement and
Series A Notes and under applicable law.
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
Series A Notes
and under applicable law with respect to the
Existing Defaults upon the expiration or termination of the Waiver
Period.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Section 2.1. To induce the Noteholders to execute and deliver this
Waiver
(which representations shall survive the execution and delivery of
this Waiver),
the Company represents and warrants to the Noteholders that:
(a) this Waiver has been duly authorized, executed and delivered
by it and
this Waiver 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,
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 (i) has been duly authorized by all requisite corporate
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action and, if required, shareholder action, (ii) does not require
the
consent or approval of any governmental or regulatory body or
agency,
and (iii) will not (A) violate (1) any provision of law, statute,
rule
or regulation or its certificate of incorporation or bylaws, (2) any
order of any
court or any
rule, regulation or order of any other
agency or government
binding upon it, or (3) any provision of any
material indenture,
agreement or other
instrument
to which it is a
party or by which its
properties or assets are or may be bound or (B)
result in a breach or constitute (alone or with due notice or lapse
of
time or both) a
default under any indenture, agreement or other
instrument referred to in clause (iii)(A)(3) of this Section
2.1(c);
(d) as of the date hereof and after giving effect to this
Waiver,
(i) no Default or Event of Default has occurred which
is continuing under the Note Purchase Agreement,
(ii) other than an
event of default or
similar event
that has occurred and
is continuing
under the Bank
Credit
Agreement solely as a
result of (A) a cross
default to the
Note Purchase
Agreement
based
on the Company's
non-compliance with
Sections 7.1(d) and 11.3 of the Note
Purchase Agreement, (B) a default under Section 5.2(k) (most
favored lenders'
provision) of the Bank Credit Agreement as
a result of such Section 5.2(k) incorporating by reference
Section 11.3 of the Note Purchase Agreement and (C) an event
of default under Section 6.1(c) (misrepresentations by the
Company that no default or event of default had occurred and
was continuing) of the Bank Credit Agreement (in each case,
which such events of default or similar events have been or
will be waived pursuant to Section 3(c) of this Waiver),
no
default, event of
default or similar event has occurred and
is continuing under the Bank Credit Agreement,
(iii) other
than the events of default or similar
events that have occurred and are continuing under the 2003
Note Purchase Agreement and 2006 Note Purchase Agreement, in
each case, similar to
the Events of Default
described in
Section 1 of this
Waiver (which
such events of default
or
similar events
have been or will be waived pursuant to
Section 3(d) and (e) of this Waiver), no default, event of
default or similar
event has occurred and is continuing
under each of the 2003 Note Purchase Agreement and 2006 Note
Purchase Agreement, and
(iv) other than a default, event of default,
amortization event,
termination event or similar event that
has occurred
and is continuing under the $100 million
accounts receivable
securitization
facility of the Company
(evidencing the
Permitted
Receivables
Securitization
Program) (the
"Securitization
Facility") as a result
of a
cross default to the
Note Purchase
Agreement based on
the
Company's
non-compliance with
Sections 7.1(d) and
11.3 of
the Note Purchase
Agreement and a cross default to the Bank
Credit Agreement
based
on similar events of default
thereunder (which such event of default, amortization event,
termination event
or similar event has been or will be
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waived pursuant to Section 3(f) of this Waiver), no default,
event of default,
amortization event or
similar event has
occurred and
is continuing under the Securitization
Facility; and
(e)
neither the Company
nor any of its
Affiliates
has paid or
agreed to pay any fees or other consideration, or given any
additional
security or
collateral, or
shortened the maturity or average life of
any indebtedness or
permanently reduced
any borrowing
capacity, in
each case, in favor of
or for the benefit
for any creditor of the
Company, in connection with the obtaining of any consents or
approvals
in connection with the transactions contemplated hereby (including,
without limitation,
under the Bank Credit Agreement, 2003 Note
Purchase Agreement and 2006 Note Purchase Agreement), other than (i)
with respect
to the Series A Notes, the payment of the waiver fee
referred to in
Section 4(a) below, (ii) with respect to the 2003
Notes, a waiver
fee equal to 0.22% of the aggregate outstanding
principal amount
of the 2003
Notes paid pro rata to the holders
thereof, (iii) with
respect to the 2006 Notes, a waiver fee equal to
0.22% of the aggregate
outstanding principal amount of the 2006 Notes
paid pro rata to the
holders thereof,
and (iv) with
respect to the
Bank Credit
Agreement,
(A) a waiver fee equal to 0.10% of the
aggregate commitments
of the Banks, (B) an increase in the commitment
fee from 0.20% to 0.30% per annum calculated on the aggregate
commitments of the
Banks during the Waiver Period, and (C) an increase
in the Applicable
Margin for Eurocurrency Rate Loans (each as defined
in the Bank Credit
Agreement) from 0.875% to 1.20% calculated on the
outstanding
Eurocurrency Rate Loans during the Waiver Period, in each
case paid pro rata to the holders thereof;
(f) the amount of Consolidated Debt of the Company and its
Subsidiaries (as defined in and as calculated under the Note
Purchase
Agreement) as of November 14, 2006 is $500,762,617.58; and
(g) the amount of all Revolving Credit Advances (as defined in
the Bank Credit Agreement) outstanding under the Bank Credit
Agreement
as of November 14, 2006 is $142,151,307.37, consisting of
$115,909,307.37 in Revolving Credit Advances made to Subsidiaries
and
$26,242,000.00 in Revolving Credit Advances made to the Company;
and as
of November 14, 2006, there are no Bid-Option Loans (as defined in
the
Bank Credit Agreement) outstanding.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS WAIVER.
This
Waiver shall not become effective until, and shall become effective
when, each and every one of the following conditions shall have been satisfied
(the "Waiver Effective Date"):
(a) executed counterparts of this Waiver, duly executed by the
Company
and
the Required Holders, shall have been delivered to the
Noteholders;
(b) the
representations and
warranties
of the Company set
forth in
Section 2 hereof
are true and
correct on and with respect to the date
hereof and
(except to the extent that any of such representations and
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warranties expressly
relate by their
terms to a prior
date) the Waiver
Effective Date;
(c) the Company shall
have furnished
to the Noteholders and their
special counsel an executed copy of an
