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, ▇.▇. ▇▇▇▇▇▇ 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.
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 amendment, modification, waiver or
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 Commitment" (as defined in the
Bank Credit Agreement) shall not be less than $500,000,000 and the Company
shall be permitted to draw thereon; and the "Termination Date" shall not be
on a date prior to January 14, 2010;
(d) the Company shall have furnished to the Noteholders and their
special counsel an executed copy of a waiver necessary to waive the
defaults or events of default occurring under the 2003 Note Purchase
Agreement which are similar to the Events of Default described in Section 1
of this Waiver, and such waiver 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);
(e) the Company shall have furnished to the Noteholders and their
special counsel an executed copy of a waiver necessary to waive the
defaults or events of default occurring under the 2006 Note Purchase
Agreement which are similar to the Events of Default described in Section 1
of this Waiver, and such waiver 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);
(f) the Company shall have furnished to the Noteholders and their
special counsel an executed copy of an amendment, modification, waiver or
consent necessary to waive any default, event of default, termination event
or amortization event occurring under the Securitization Facility resulting
from any cross default to the Note Purchase Agreement based on the
Company's non-compliance with Sections 7.1(d) and 11.3 thereof and a cross
default to the Bank Credit Agreement based on similar events of default
thereunder, 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
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waiver thereunder not expiring before the end of the Waiver Period
hereunder); and
(g) a statement of the Company's and its Subsidiaries' cash balances
as of the close of business on Friday, November 10, 2006, certified as true
and correct by a Senior Financial Officer.
SECTION 4. CONDITIONS SUBSEQUENT.
(a) This Waiver shall be subject to the condition subsequent that each
holder of Series A Notes shall have received on or before November 15, 2006, a
waiver fee, whether or not such holder has signed this Waiver, in an amount
equal to 0.22% of the aggregate outstanding principal amount of the Series A
Notes held by such holder of Series A Notes. Such fee shall be deemed earned
when paid and shall not be subject to recovery or repayment in the event this
Waiver is terminated or rescinded for any reason.
(b) This Waiver shall be further subject to the condition subsequent that
the Noteholders shall have received, within 10 Business Days from the date
hereof, a copy of the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance by the Company of this
Waiver, certified by its Secretary or an Assistant Secretary, together with
documentation evidencing all other proceedings taken in connection with the
transactions contemplated by this Waiver, and all documents necessary to the
consummation thereof, in each case, which shall be reasonably satisfactory in
form and substance to the Noteholders and ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, their special
counsel.
(c) This Waiver shall be further subject to the condition subsequent that
the Company shall pay the reasonable fees and disbursements of the Noteholders'
special counsel, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, incurred in connection with the
negotiation, preparation, execution and delivery of this Waiver and the
transactions contemplated hereby within one (1) Business Day from the date that
such fees and disbursements are invoiced to the Company. Further, upon receipt
of any supplemental statement after the initial invoice, the Company will pay
such additional fees and disbursements of the Noteholders' special counsel which
were not reflected in their accounting records as of the time of the delivery of
the initial statement of fees and disbursements. The payment of the fees and
disbursements pursuant to this Section 4(c) does not preclude the Noteholders'
rights to indemnification and reimbursement for other costs and expenses as
provided in Section 16 of the Note Purchase Agreement.
SECTION 5. COVENANTS.
In addition to and without limiting the Company's obligations under the
Note Purchase Agreement (and notwithstanding anything to the contrary in the
Note Purchase Agreement), the Company covenants and agrees that at all times
from the date hereof and continuing through April 15, 2007:
(a) the Company will not at any time permit Consolidated Debt to exceed
$520,762,617.58;
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(b) the Company will not, and will not permit any of its Subsidiaries to,
at any time, directly or indirectly create, incur, assume, guarantee, or
otherwise become liable in respect of, (i) in the case of the Company, any Debt
secured by Liens on any of its properties or assets (including, without
limitation, any document or instrument in respect of goods or accounts
receivable), and (ii) in the case of Subsidiaries, any Debt (whether secured or
unsecured) or indebtedness in respect of the Permitted Receivables
Securitization Program, except, in each case, (A) any Debt (secured or
unsecured) outstanding on the date hereof, (B) Liens incurred on receivables,
related assets and collections of the Company or a 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 and (C) indebtedness of one or more Special Purpose
Subsidiaries incurred in connection with 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
Liens on the assets of such Special Purpose Subsidiaries securing such Permitted
Receivables Securitization Program;
(c) the Company will not, and will not permit any Subsidiary to, at any
time, make any Restricted Payment (as defined below), except (i) Restricted
Payments from Subsidiaries to the Company, (ii) regularly scheduled quarterly
dividends to the Company's shareholders not to exceed $0.0125 per share, (iii)
payments of Revolving Credit Advances (as defined in the Bank Credit Agreement)
under the Bank Credit Agreement made in the ordinary course of borrowing,
repaying and reborrowing, provided the balance of the Revolving Credit Advances
under the Bank Credit Agreement does not at any time fall below $157,893,617.58,
provided, however, the Company may reduce the balance of and pay back Revolving
Credit Advances below $157,893,617.58 if any payment of Revolving Credit
Advances below such balance is paid on a pro rata basis among the Series A Notes
(subject to Section 8.2 of the Note Purchase Agreement), 2003 Notes, 2006 Notes
and Bank Credit Agreement, (iv) payments of principal and interest by a Special
Purpose Subsidiary in respect of indebtedness incurred under a Permitted
Receivables Securitization Program (which, for avoidance of doubt, includes
periodic repayments of capital or periodic reinvestments of purchaser interests
under such Permitted Receivables Securitization Program), provided that at the
time of such payment and after giving effect thereto, the Company and its
Subsidiaries are in compliance with the terms of Section 5(b) of this Waiver and
(v) payment by the Company of its checking overdraft with National City Bank
provided such payment is made with Revolving Credit Advances under the Bank
Credit Agreement;
(d) the Company will not, and will not permit any Subsidiary to, at any
time, make any Investment (as defined below), except (i) Investments outstanding
on the date hereof, (ii) loans to one specific customer of the Company for short
term liquidity not to exceed an aggregate outstanding principal amount at any
time of $2,000,000, (iii) Investments in cash and cash equivalents (as
determined in accordance with GAAP) and (iv) inter-company loans for
inter-company financing purposes in the ordinary course of business and
consistent with past practice, provided that with respect to any loans made from
a Subsidiary to the Company, such loans are unsecured and subordinated to the
Series A Notes on terms and conditions satisfactory to the Required Holders and
their counsel, and provided further, in each case under this subclause (iv), so
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long as immediately before and after giving effect to any such loans, no Default
or Event of Default would exist;
(e) the Company will ensure at all times (i) that the "Aggregate Revolving
Credit Commitment" (as defined in the Bank Credit Agreement) will not be less
than $500,000,000 and that the Company shall be permitted to draw thereon and
(ii) that the "Termination Date" shall not be on a date prior to January 14,
2010;
(f) the Company will not, and will not permit any Subsidiary to, at any
time, make any Transfer, other than (i) inventory sold in the ordinary course of
business on customary terms, (ii) the sale by a Subsidiary of a building located
in Switzerland with approximate net sale proceeds of $3,000,000 (which such
proceeds will be used in the ordinary course of business of such Subsidiary and
in compliance with the Note Purchase Agreement, as modified by this Waiver),
(iii) Transfers of receivables, related assets and collections owned by the
Company or a Subsidiary being transferred to a Special Purpose Subsidiary for
fair market value pursuant to a Permitted Receivables Securitization Program
provided that at the time of such Transfer and after giving effect thereto, the
Company and its Subsidiaries are in compliance with the terms of Section 5(b) of
this Waiver and (iv) Transfers related to Investments permitted pursuant to
Section 5(d)(iv) of this Waiver;
(g) on the Monday of each week (or the next Business Day if Monday is a
holiday), the Company will furnish to each Noteholder, a certified statement of
the Company's and its Subsidiaries' cash balances and the Revolving Credit
Advances under the Bank Credit Agreement, in each case, as of the close of
business on the Friday of the immediately preceding week (or the first Business
Day immediately preceding Friday if Friday is a holiday);
(h) if at any time the Company or any Subsidiary shall enter into any
agreement relating to or amending any terms or conditions applicable to any
agreement relating to any of its Debt in excess of $30,000,000 which includes
covenants or defaults not substantially provided for in the Note Purchase
Agreement, as modified by this Waiver, or more favorable to the lender or
lenders thereunder than those provided for in the Note Purchase Agreement, as
modified by this Waiver, then the Company shall promptly so advise the
Noteholders, and thereupon, if the Required Holders shall so request, upon
notice to the Company, the Company shall enter into an amendment to the Note
Purchase Agreement providing for substantially the same covenants, defaults and
other terms and conditions as those provided for in such agreement to the extent
required and as may be selected by the Required Holders; and in addition to the
forgoing, any covenants or defaults or similar provisions (which include,
without limitation, any provisions requiring mandatory prepayments or
defeasance, subject, however, in each case to Section 8.2 of the Note Purchase
Agreement) in the Bank Credit Agreement or any agreements or instruments
executed in connection therewith not substantially provided for in the Note
Purchase Agreement, as modified by this Waiver, or more favorable to the Banks
than those provided for in the Note Purchase Agreement, as modified by this
Waiver, are hereby incorporated into the Note Purchase Agreement to the same
extent as if set forth herein, and no subsequent amendment, waiver termination
or modification thereof shall affect any such covenants, terms, conditions or
defaults as incorporated herein;
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(i) the Company will not, and will not permit any Subsidiary to, (i) enter
into any agreement restricting the ability of the Company and its Subsidiaries
to amend or modify the Note Purchase Agreement or Series A 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, (ii) enter into any agreement or arrangement requiring any defeasance of
the Bank Credit Agreement, (iii) amend, supplement or otherwise modify the Bank
Credit Agreement or any agreements or instruments executed in connection
therewith other than pursuant to the waiver/amendment to the Bank Credit
Agreement referred to in Section 3(c) hereof or (iv) pay or agree to pay any
fee, interest or other compensation or consideration to the Agent or Banks under
the Bank Credit Agreement other than as required by the Bank Credit Agreement in
effect on the Waiver Effective Date, as modified by the waiver/amendment to the
Bank Credit Agreement referred to in Section 3(c); and
(j) it shall be an Event of Default under Section 12(f) of the Note
Purchase Agreement if the Company or any Subsidiary is in default in the
performance of or compliance with any other term of any evidence of any Debt
(other than any term under the Note Purchase Agreement and the Series A Notes),
that individually or together with such other Debt as to which any such failure
exists has an aggregate outstanding principal amount of at least $5,000,000 (or
its equivalent in other applicable currencies), or of compliance of any
mortgage, indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Debt has become,
or has been declared (or one or more Persons are entitled to declare such Debt
to be), due and payable before its stated maturity or before its regularly
scheduled dates of payment.
For purposes of this Section 5,
"Investment" means (i) any investment, made in cash or by delivery of
property, by either of the Company or any of its Subsidiaries in any Person
(other than an existing Subsidiary), whether by acquisition of stock, debt or
other obligation or security, or by loan, guaranty, advance, extension of credit
(other than accounts receivable arising from the sale of goods and services in
the ordinary course of business of the Company and its Subsidiaries), capital
contribution or otherwise or (ii) any transaction, or any series of related
transactions, by which the Company or any of its Subsidiaries acquires any
ongoing business or all or substantially all of the assets of, any firm,
corporation or division thereof, whether through purchase of assets, purchase of
stock, merger, amalgamation or otherwise; and
"Restricted Payment" means, with respect to the Company and any Subsidiary,
(i) any dividend or other distribution (whether in cash, securities or other
property) with respect to any capital stock or other equity interest of the
Company or such Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any capital stock or other equity interest of the Company or such Subsidiary and
(ii) any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of any Debt (other than a pro rata
payment or distribution among the Series A Notes (subject to Section 8.2 of the
Note Purchase Agreement), 2003 Notes, 2006 Notes and Bank Credit Agreement) or
10
indebtedness in respect of the Permitted Receivables Securitization Program, or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, defeasance or termination of any Debt (other than a pro
rata payment or distribution among the Series A Notes (subject to Section 8.2 of
the Note Purchase Agreement), 2003 Notes, 2006 Notes and Bank Credit Agreement)
or indebtedness in respect of the Permitted Receivables Securitization Program.
In addition to the foregoing, the Company shall use its best efforts to
begin the process of obtaining, and shall continue to diligently pursue, a
written rating on its long term senior unsecured debt from any nationally
recognized statistical rating organization.
Further, the Company agrees that at a mutually agreeable time and location
in New York, New York, on Thursday, November 30, 2006 (or, if such date becomes
reasonably impracticable, such other date on or prior to December 8, 2006, as
reasonably agreed to between the Company and the Noteholders), the Chief
Financial Officer and Treasurer of the Company will meet with Noteholders who
choose to attend such meeting, at which meeting shall be reviewed the business,
operations, properties, prospects and financial and other condition of the
Company and its Subsidiaries and the measures being taken by the Company with
respect to a recapitalization of the Company and its Subsidiaries.
The Company hereby acknowledges and agrees that its failure to comply with
the covenants and agreements under this Section 5 shall constitute an immediate
Event of Default under Section 12(c) of the Note Purchase Agreement.
SECTION 6. MISCELLANEOUS.
Section 6.1. In order to induce the Noteholders to enter into this Waiver,
the Company acknowledges and agrees that: (a) neither the Company nor any of its
Subsidiaries has any claim or cause of action against any of the Noteholders or
any of their respective directors, trustees, officers, employees or agents
(collectively, the "Released Parties") relating to or arising out of the Note
Purchase Agreement or Series A Notes or any of the transactions related thereto;
(b) neither the Company nor any of its Subsidiaries has any offset right, right
of recoupment, counterclaim or defense of any kind against any of their
respective obligations, indebtedness or liabilities to any of the Released
Parties; and (c) each of the Released Parties has heretofore properly performed
and satisfied in a timely manner all of its obligations to the Company and its
Subsidiaries under the Note Purchase Agreement. Notwithstanding this
representation and as further consideration for the agreements and
understandings herein, the Company, on behalf of itself and its employees,
agents, executors, heirs, successors and assigns (the "Releasing Parties"),
hereby releases the Noteholders, its respective predecessors, officers,
directors, trustees, employees, agents, attorneys, affiliates, subsidiaries,
successors and assigns, from any liability, claim, right or cause of action
which now exists or hereafter arises as a result of acts, omissions or events
occurring on or prior to the date hereof, whether known or unknown, including
but not limited to claims arising from or in any way related to the Note
Purchase Agreement or Series A Notes or any of the transactions relating
thereto. No Released Party shall be liable with respect to, and the Company
hereby waives, releases and agrees not to ▇▇▇ for, any special, indirect or
consequential damages relating to the Note Purchase Agreement and Series A Notes
11
or arising out of its activities in connection herewith or therewith (whether
before, on or after the date hereof).
Section 6.2. This Waiver shall be construed in connection with and as part
of the Note Purchase Agreement, and except as modified and expressly amended by
this Waiver, all terms, conditions and covenants contained in the Note Purchase
Agreement are hereby ratified and shall be and remain in full force and effect.
Section 6.3. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Waiver may refer to the Note Purchase Agreement without making specific
reference to this Waiver but nevertheless all such references shall include this
Waiver unless the context otherwise requires.
Section 6.4. The descriptive headings of the various Sections or parts of
this Waiver are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
Section 6.5. This Waiver shall be governed by and construed in accordance
with the law of the State of New York excluding choice-of-law principles of the
law of such State that would require the application of laws of a jurisdiction
other than such State.
Section 6.6. The provisions of Section 5 and Section 6.1 of this Waiver
shall survive and continue in effect following any termination, rescission or
expiration of this Waiver.
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Section 6.7. This Waiver may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall constitute but
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Waiver by facsimile shall be effective as delivery of a manually
executed counterpart of this Waiver.
INVACARE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
13
The foregoing is hereby agreed to as of the date thereof:
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Its V.P. Fixed Income Securities
$8,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
J. ROMEO & CO. (as nominee for MONY
Life Insurance Company)
By /s/ J Romeo & Co
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Its Partner
$9,000,000 Series A
J. ROMEO & CO. (as nominee for MONY
Life Insurance Company)
By /s/ J Romeo & Co
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Its Partner
$10,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
HARE & CO. (as nominee for MONY Life Insurance
Company)
By________________________________
Its
$1,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
THE BALTIMORE LIFE INSURANCE COMPANY
By AllianceBernstein LP
its Investment Advisor
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
$2,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
THE OHIO CASUALTY INSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Senior Vice President, General Counsel &
Secretary
$10,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
NATIONWIDE LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Authorized Signatory
$10,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Global Investors, LLC, a
Delaware limited liability company,
its authorized signatory
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: EPP Counsel
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Counsel
$20,000,000 Series A
The foregoing is hereby agreed to as of the date thereof:
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director, Special Situations
$5,000,000 Series A
TIAA-CREF LIFE INSURANCE COMPANY
By: Teachers Insurance and Annuity Association of
America, as Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director, Special Situations
$5,000,000 Series A