Exhibit 10.4
SECOND OMNIBUS WAIVER, AMENDMENT AND REAFFIRMATION OF PERFORMANCE UNDERTAKING
THIS SECOND OMNIBUS WAIVER, AMENDMENT AND REAFFIRMATION OF PERFORMANCE
UNDERTAKING, dated as of December 15, 2006 (this "Waiver"), is by and among:
(a) Invacare Corporation, an Ohio corporation ("Invacare"), Healthtech
Products, Inc., a Missouri corporation, and Invacare Supply Group, Inc., a
Massachusetts corporation (each of the foregoing including Invacare, an
"Originator" and collectively, the "Originators"),
(b) Invacare Receivables Corporation, a Delaware corporation ("IRC"
and, together with the Originators, the "Companies"),
(c) Park Avenue Receivables Company, LLC ("Conduit"), and
(d) JPMorgan Chase Bank, N.A., individually (together with Conduit,
the "Purchasers") and as agent (together with its successors and assigns in
such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Originators and IRC are parties to that certain
Receivables Sale Agreement, dated as of September 30, 2005 (the
"Receivables Sale Agreement");
WHEREAS, IRC, as Seller, Invacare, as Servicer, the Purchasers and the
Agent are parties to that certain Receivables Purchase Agreement dated as
of September 30, 2005, as heretofore amended (the "Receivables Purchase
Agreement" and, together with the Receivable Sale Agreement, the
"Agreements");
WHEREAS, ▇▇▇▇▇▇▇▇ has executed that certain Performance Undertaking
dated as of September 30, 2005, in favor of IRC (the "Performance
Undertaking);
WHEREAS, the parties entered into an Omnibus Waiver, Amendment and
Reaffirmation of Performance Undertaking dated as of November 14, 2006 (the
"Existing Waiver") pursuant to which the Agent and the Purchasers, among
other things, waived a Termination Event and Amortization Event through and
including the date hereof;
WHEREAS, the Companies have asked the Agent and the Purchasers to
extend the waivers granted pursuant to the Existing Waiver through January
31, 2007 (as the same may be extended in accordance with the terms hereof,
the "Outside Waiver Termination Date");
WHEREAS, the parties wish to (a) extend the waivers granted under the
Existing Waiver through the Outside Waiver Termination Date, (b) amend the
Receivables Purchase Agreement, and (c) reaffirm the Performance
Undertaking, in each case, on the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, simultaneously herewith, ▇▇▇▇▇▇▇▇ and various noteholders are
entering into a Second Waiver and Amendment, dated as of December 15, 2006
(the "Noteholder Waiver") to the separate and several Note Purchase
Agreements dated as of April 27, 2006, and a First Amendment to Waiver and
Amendment Agreement, dated as of December 15, 2006 with respect to their
certain Credit Agreement dated as of January 14, 2005 (the "Bank Waiver"
and, together with the Noteholder Waiver, the "Other December 2006
Waivers");
NOW, THEREFORE, in consideration of the premises herein contained, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise defined
shall have their meanings as attributed to such terms in the Agreements.
2. Limited Waivers; Amendments.
2.1. Limited Waivers.
(a) Any Potential Termination Event or Termination Event that may have
arisen (or that may at any time hereafter prior to the Outside Waiver
Termination Date arise) under: (i) Section 5.1(c) of the Receivables Sale
Agreement by virtue of Invacare's failure to observe Sections 5.2(a),
5.2(c), 6.1(c) and 6.1(f) of the Five-Year Credit Agreement and/or Sections
7.1(d), 11.3 and 12 of each of the note purchase agreements executed in
connection with the Senior Unsecured Notes (as defined in the Five-Year
Credit Agreement) and incorporated by reference into Section 5.2(k) of the
Five-Year Credit Agreement, (ii) Section 5.1(a)(ii) of the Receivables Sale
Agreement by virtue of Invacare's failure to observe Section 4.1(b)(i) of
the Receivables Sale Agreement, and (iii) Section 9.1(a)(ii) of the
Receivables Purchase Agreement by virtue of Invacare's failure to observe
Section 7.1(b)(v) of the Receivables Purchase Agreement (all of the
foregoing, collectively, the "Existing Defaults") is hereby waived for the
period commencing on the date hereof through the earliest to occur of (A)
the Outside Waiver Termination Date, (B) any Potential Termination Event or
Termination Event other than the Cross Defaults, (C) the breach or
nonperformance by any of the Companies of any covenant, agreement or
condition set forth in this Waiver, and (D) the date on which any
representation or warranty in Section 3 hereof fails to be true and
correct.
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(b) Any Amortization Event or Potential Amortization Event that may
have arisen (or that may at any time hereafter prior to the Outside Waiver
Termination Date arise) under Section 9.1(c) of the Receivables Purchase
Agreement by virtue of the Existing Defaults is hereby waived for the
period commencing on the date hereof through the earliest to occur of (i)
the Outside Waiver Termination Date, (B) any Potential Amortization Event
or Amortization Event other than the Existing Defaults, (C) the breach or
nonperformance by any of the Companies of any covenant, agreement or
condition set forth in this Waiver, and (D) 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, Invacare has
provided the Agent 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 Invacare in an aggregate amount sufficient to pay in
full all outstanding obligations of Invacare and its Subsidiaries under the
Primary Loan Documents (as defined in the Noteholder Waiver) on or prior to
February 15, 2007, in form and substance satisfactory to the Agent and (ii)
the waiver period under each of the Other December 2006 Waivers has
likewise been (or shall be, concurrently with the extension of this Waiver)
extended to February 15, 2007 on terms and conditions satisfactory to the
Agent; 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 Invacare in
replacement of such terminated Commitment Letter and delivered to the Agent
prior to such termination, are sufficient to pay in full all outstanding
obligations of Invacare and its Subsidiaries under the Primary Loan
Documents on or prior to February 15, 2007) or (y) the waiver period under
any of the Other December 2006 Waivers shall have reverted to January 31,
2007 then, in any such case, the Outside Waiver Termination Date shall
revert to January 31, 2007; provided, further that if any of the events
described in the foregoing clauses (x) or (y) occurs after January 31,
2007, the waivers contained herein shall expire as of the occurrence of
such event without notice or any further action.
2.2. Amendments.
(a) Section 6.2(a) of the Receivables Purchase Agreement is hereby
amended to insert ", Weekly Report" after the term "Monthly Report".
(b) Section 8.5 of the Receivables Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
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Section 8.5. Reports. The Servicer shall prepare and forward to the
Agent (i) on the 12th Business Day of each month, a Monthly Report, (ii) on
Wednesday of each week commencing on or after December 17, 2006 (or if any
such Wednesday is not a Business Day, on the next succeeding Business Day
thereafter, a Weekly Report as of the last Business Day of the week then
most recently ended, (iii) from and after the occurrence of an Amortization
Event, at such times as Agent shall request, an interim report in form
reasonably acceptable to the Agent showing the amount of Eligible
Receivables, and (iv) at such times as the Agent shall reasonably request,
a listing by Obligor of all Receivables together with an aging of such
Receivables.
(c) A new Exhibit XI is hereby added to the Receivables Purchase
Agreement which reads in the form of Annex A to this Waiver.
(d) The following new definitions are hereby added to Exhibit I of the
Receivables Purchase Agreement in their appropriate alphabetical order:
"DLL Discount Factor" means, on any date of determination, 25% of the
aggregate Outstanding Balance of "IVC & ICCG lease invoices" as reported on
the most recent Monthly Report.
"Weekly Report" means a report, in substantially the form of Exhibit
XI hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to clause (ii) of Section 8.5.
(e) The definitions of the following terms in the Receivables Purchase
Agreement are hereby amended and restated in their entirety to read as
follows:
"Aggregate Reserves" means, on any date of determination, 38% of the
Net Receivables Balance.
"Designated Obligor" means (a) Mobility Products Unlimited, and (b)
any other Obligor designated in writing by the Agent, in the exercise of
reasonable credit judgment, as being unacceptable to it.
"Liquidity Termination Date" means the Outside Waiver Termination Date
or such later date as extended pursuant to the terms of this Agreement.
"Monthly Report" means a report, in substantially the form of Exhibit
IX hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to clause (i) of Section 8.5.
"Net Eligible Receivable" means the total Eligible Receivables minus
the Cash Discount Factor and minus the DLL Discount Factor.
"Outside Waiver Termination Date" has the meaning specified in that
certain Second Omnibus Waiver, Amendment and Reaffirmation of Performance
Undertaking, dated as of December 15, 2006 by and among the parties hereto.
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3. Certain Representations. In order to induce the Agent and the Purchasers
to enter into this Waiver, each of the Companies hereby represents and warrants
to the Agent and the Purchasers that, after giving effect to the waivers
contained in Section 2 hereof, (a) no Termination Event, Potential Termination
Event, Amortization Event or Potential Amortization Event exists and is
continuing as of the Effective Date (as defined in Section 4 below), (b) each of
the Agreements to which such Company is a party, as amended hereby, constitutes
the legal, valid and binding obligations of such Company enforceable against
such Company in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law and (c) each of such Company's representations
and warranties contained in each of the Agreements to which it is a party is
true and correct as of the Effective Date as though made on such date (except
for such representations and warranties that speak only as of an earlier date).
4. Effective Date; Conditions Precedent. This Waiver shall become effective
as of the date hereof (the "Effective Date") upon receipt by the Agent of (a)
counterparts of this Waiver, duly executed by each of the parties hereto, (b) a
copy of each of the Other December 2006 Waivers executed by the parties thereto,
on terms and conditions acceptable to the Agent, (c) payment in immediately
available funds of $6,927.20 in outstanding legal fees and disbursements of the
Agent's counsel as of November 30, 2006, (d) counterparts of an amended and
restated Fee Letter, duly executed by the Agent, the Conduit, IRC and ▇.▇.
▇▇▇▇▇▇ Securities Inc., and (e) payment of a fully-earned and non-refundable
Waiver Fee (as defined in the Fee Letter) in immediately available funds.
5. Ratification; Reaffirmation of Performance Undertaking. Except as
expressly modified hereby, the Agreements, as amended hereby, is hereby
ratified, approved and confirmed in all respects. By its signature below,
Invacare hereby consents to the terms of this Waiver and hereby confirms that
its Performance Undertaking remains unaltered and in full force and effect.
6. Reference to Agreement. From and after the Effective Date hereof, each
reference in the Agreements to "this Agreement", "hereof", or "hereunder" or
words of like import, and all references to the Agreements in any and all
agreements, instruments, documents, notes, certificates and other writings of
every kind and nature shall be deemed to mean the Agreements in each case, as
modified by this Waiver.
7. Costs and Expenses. The Seller agrees to pay all reasonable costs, fees,
and out-of-pocket expenses (including reasonable attorneys' fees and time
charges of attorneys for the Agent) incurred by the Agent in connection with the
preparation, execution and enforcement of this Waiver.
8. CHOICE OF LAW. THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
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9. Execution in Counterparts. This Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Waiver as of the date
first above written.
PARK AVENUE RECEIVABLES COMPANY, LLC
BY: JPMORGAN CHASE BANK, N.A., ITS ATTORNEY-IN-FACT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
JPMORGAN CHASE BANK, N.A., INDIVIDUALLY AND AS AGENT
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
INVACARE CORPORATION,
HEALTHTECH PRODUCTS, INC. AND
INVACARE SUPPLY GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
INVACARE RECEIVABLES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Annex A
EXHIBIT XI
FORM OF WEEKLY REPORT
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