Exhibit 10.5
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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 April 27, 2006
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Re: $150,000,000 6.15% Senior Notes due April 27, 2016
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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
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 (collectively, the "Note
Purchase Agreement"),
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"), pursuant to which
the Company issued and
sold its $150,000,000
6.15% Senior Notes due
April 27,
2016 (the "Notes"). The Noteholders are the holders of the
outstanding principal
amount of the 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 February 27, 1998, between
the Company and
each of the
institutions
identified on Schedule
A thereto (said Note Purchase
Agreements, as
heretofore
amended, collectively, the "1998 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 and (ii) $20,000,000 6.60%
Series B Senior Notes due February 27, 2005 (collectively, the
"1998 Notes").
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 (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").
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
the Events of Default that have occurred and are continuing
under Section
12(c)
as a result of such non-compliance.
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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
respect to any other breach of Sections 7.1(d) or 11.3 or any other
provision of
the Note Purchase Agreement.
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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
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 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 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 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
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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 1998 Note Purchase
Agreement and 2003 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 1998 Note Purchase Agreement and 2003 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 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
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(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, 1998 Note
Purchase Agreement and 2003 Note Purchase Agreement),
other than (i) with
respect to the Notes,
the payment of the waiver fee
referred to in Section 4(a) below, (ii) with respect to the 1998
Notes, a
waiver fee equal to 0.22% of the aggregate outstanding principal amount
of
the
1998 Notes paid pro rata to the holders thereof, (iii) 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,
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
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 amendment, modification, waiver or
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consent necessary to
waive any default or event of default occurring under
the
Bank Credit Agreement
resulting from (i) any 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, (ii) the Company's
non-compliance with 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 (iii) 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, and any such amendment, modification, waiver or consent
shall be reasonably
satisfactory in form
and substance to the Noteholders
and
their special counsel (including, without limitation, with respect to
any
waiver thereunder
not expiring before the end of the Waiver
Period
hereunder); the
"Aggregate Revolving Credit Commitme
