FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of August 12, 2005 (this
"Amendment"), is among INVACARE CORPORATION, an Ohio corporation (the
"Company"), each of the Borrowing Subsidiaries party thereto (collectively with
the Company, the "Borrowers"), the banks set forth on the signature pages hereof
(collectively, the "Banks") and JPMORGAN CHASE BANK, N.A., a national banking
association, as agent for the Banks (in such capacity, the "Agent").
RECITALS
A. The Borrowers, the Agent and the Banks are parties to a Credit
Agreement, dated as of January 14, 2005 (as now and hereafter amended, the
"Credit Agreement"), pursuant to which the Banks agreed, subject to the terms
and conditions thereof, to extend credit to the Borrowers.
B. The Borrowers, the Agent and the Banks desire to amend the Credit
Agreement strictly in accordance with the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE 1.
AMENDMENTS
Upon fulfillment of the conditions set forth in Article 3 hereof, the
Credit Agreement shall be amended as follows:
1.1 The definition of "Adjusted EBITDA" in Section 1.1 shall be amended and
restated in its entirety to read as follows:
"Adjusted EBITDA" shall mean, with respect to any person, for any
period, the sum of (a) EBIT for such period, plus (b) all amounts deducted
in determining such EBIT on account of depreciation and amortization
expense, minus (c) any extraordinary, unusual or non-recurring gains or
other income (or plus any extraordinary, unusual or non-recurring non-cash
losses) of the Company and its Subsidiaries, and related tax effects, in
accordance with GAAP, plus (d) any non-cash losses or charges related to
restructuring efforts incurred during such period, plus (e) any cash
charges related to restructuring efforts incurred during such period up to
an aggregate amount of $25,000,000 since the Effective Date.
Notwithstanding anything herein, in any financial statements of the Company
or in GAAP to the contrary, for purposes of calculating and determining
Adjusted EBITDA, (i) any Acquisition made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the period for which such Adjusted
EBITDA was calculated shall be deemed to have occurred on the first day of
the relevant period for which such Adjusted EBITDA was calculated on a pro
forma basis acceptable to the Agent, but without giving effect to any
projected synergies resulting from such Acquisition and (ii) any amounts
which are attributable to any asset, investment or person which has been
divested by the Company or any Subsidiary during the period for which such
Adjusted EBITDA was calculated shall be excluded from the calculation of
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Adjusted EBITDA and such divestiture shall be deemed to have occurred on
the first day of the relevant period for which such Adjusted EBITDA was
calculated.
1.2 The definition of "Total Debt" in Section 1.1 shall be amended and
restated in its entirety to read as follows:
"Total Debt" as of any date for any person, shall mean: (a) all debt
for borrowed money and similar monetary obligations evidenced by bonds,
notes, debentures, Capitalized Lease obligations or otherwise; (b) all
liabilities secured by any Lien existing on property owned or acquired
subject thereto, whether or not the liability secured thereby shall have
been assumed; (c) all reimbursements obligations under outstanding letters
of credit in respect of drafts which (i) may be presented or (ii) have been
presented and have not yet been paid, (d) the aggregate outstanding amount
of all Lease Receivables Securitization Transactions, based on the
aggregate outstanding amount sold, assigned, discounted or otherwise
transferred or financed, whether or not shown as a liability on a
consolidated balance sheet of such person, as reasonably satisfactory to
the Agent (but excluding the aggregate outstanding under any Trade
Receivables Securitization Transaction permitted pursuant to Section
5.2(n)), and (e) all Contingent Liabilities relating to any of the
obligations of others similar in character to those described in the
foregoing clauses (a) through (d), but excluding all recourse obligations
of the Company, ICC or any other wholly-owned Subsidiary under certain
third party financing arrangements offered to customers which are
acceptable to the Agent (including arrangements with De Lage Landen).
1.3 Section 5.2(c) shall be amended and restated in its entirety to read as
follows:
(c) Total Debt to Adjusted EBITDA. Permit or suffer the ratio,
determined as of the end of each of the Company's fiscal quarters for the
four most recently ended fiscal quarters, of Consolidated Total Debt of the
Company and its Subsidiaries to Consolidated Adjusted EBITDA of the Company
and its Subsidiaries for the four most recently ended fiscal quarters to
exceed (i) during the period from and including the Effective Date through
December 30, 2006, 3.50 to 1.0, and (ii) commencing December 31, 2006 and
thereafter, 3.25 to 1.0.
1.4 A new Section 5.2(n) shall be added at the end of Section 5.2 to read
as follows:
(n) Trade Receivables Securitization Transactions. Permit or suffer
the aggregate outstanding amount of all Trade Receivables Securitization
Transactions at any time to exceed $125,000,000, based on the aggregate
outstanding amount sold, assigned, discounted or otherwise transferred or
financed, whether or not shown as a liability on a consolidated balance
sheet of such person.
ARTICLE 2.
REPRESENTATIONS
Each Borrower represents and warrants to the Agent and the Banks that:
2.1 The execution, delivery and performance of this Amendment is within its
powers, has been duly authorized and is not in contravention with any law, of
the terms of its Articles of Incorporation or By-laws, or any undertaking to
which it is a party or by which it is bound.
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2.2 This Amendment is the legal, valid and binding obligation of such
Borrower enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article IV of the Credit Agreement
are true on and as of the date hereof with the same force and effect as if made
on and as of the date hereof.
2.4 No Event of Default or Default exists or has occurred and is continuing
on the date hereof.
ARTICLE 3.
CONDITIONS OF EFFECTIVENESS
3.1 This Amendment shall not become effective until signed by each
Borrower, the Agent and the Required Banks.
ARTICLE 4.
MISCELLANEOUS.
4.1 On the date hereof, the Company shall pay to the Agent, for the pro
rata benefit of each Bank signing this Amendment on or before the date hereof
and based on such Bank's Commitments, an amendment fee in an amount equal to 2.5
basis points on the aggregate amount of such Bank's Commitment, which fees shall
be distributed to such Banks within two Business Days after the date hereof.
4.2 The Company has informed the Agent and the Banks it intends to issue
new senior unsecured notes. In connection with such new issuance, the existing
Senior Unsecured Notes will be amended. One or more of the note purchase
agreements evidencing the Senior Unsecured Notes contain a covenant "Incurrence
of Priority Debt" which restricts the incurrence of certain described debt by
the Company and its subsidiaries. Due to the significant increase in borrowings
by the Borrowing Subsidiaries under the Credit Agreement, the Company must seek
modification of such covenant from the holders of the Senior Unsecured Notes.
The Company is requesting that the note purchase agreements be amended to
exclude the obligations of the Borrowing Subsidiaries under the Credit Agreement
from the limitation on Priority Debt if the Agent and the Banks enter into an
intercreditor agreement with the holders of the Senior Unsecured Notes pursuant
to which the Banks agree to share on a pro rata basis any proceeds received by
the Banks from the Borrowing Subsidiaries after acceleration of any of the
Senior Unsecured Notes or the Loans or upon any filing of any bankruptcy
proceeding by the Company or any Subsidiary. Each of the Banks hereby agrees to
enter into an intercreditor agreement as described above with the holders of the
Senior Unsecured Notes and any of the holders of the new notes to be issued, in
form and substance reasonably satisfactory to such Bank.
4.3 References in the Credit Agreement or in any note, certificate,
instrument or other document to the "Credit Agreement" shall be deemed to be
references to the Credit Agreement as amended hereby and as further amended from
time to time.
4.4 Each Borrower agrees to pay and to save the Agent harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Agent in connection with
preparing this Amendment and the related documents.
4.5 Each Borrower acknowledges and agrees that the Agent and the Banks have
fully performed all of their obligations under all documents executed in
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connection with the Credit Agreement and all actions taken by the Agent and the
Banks are reasonable and appropriate under the circumstances and within their
rights under the Credit Agreement and all other documents executed in connection
therewith and otherwise available. Each Borrower represents and warrants that it
is not aware of any claims or causes of action against the Agent or any Bank,
any participant lender or any of their successors or assigns.
4.6 Except as expressly amended hereby, each Borrower agrees that the
Credit Agreement, the Notes, the Security Documents and all other documents and
agreements executed by the Borrower in connection with the Credit Agreement in
favor of the Agent or any Bank are ratified and confirmed and shall remain in
full force and effect and that it has no set off, counterclaim or defense with
respect to any of the foregoing. Terms used but not defined herein shall have
the respective meanings ascribed thereto in the Credit Agreement.
4.7 This Amendment may be signed upon any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
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IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of August 12, 2005.
INVACARE CORPORATION
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Chief Financial Officer
INVACARE (DEUTSCHLAND) GmbH
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
INVACARE AUSTRALIA PTY. LTD.
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
INVACARE CANADA INC.
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
INVACARE S.A.
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
INVACARE (UK) LIMITED
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
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INVACARE INTERNATIONAL SARL
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
DOMUS HOMECARE AG
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
INVACARE HOLDINGS CV
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
SCANDINAVIAN MOBILITY INTERNATIONAL APS
By: /s/ Gregory C. Thompson
-----------------------
Print Name: Gregory C. Thompson
Title: Authorized Officer
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JPMORGAN CHASE BANK, N.A., as a Bank and as
Agent
By: /s/ Dana E. Jergens
-----------------------
Print Name: Dana E. Jergens
Title: Vice President
KEYBANK NATIONAL ASSOCIATION, as a Bank and
Syndication Agent
By: /s/ J.T. Taylor
-----------------------
Print Name: J.T. Taylor
Title: Senior Vice President
NATIONAL CITY BANK, as a Bank and Documentation
Agent
By: /s/ Robert S. Coleman
-----------------------
Print Name: Robert S. Coleman
Title: Senior Vice President
BANK OF AMERICA, N.A., as a Bank and
Documentation Agent
By: /s/ B. Kenneth Burton Jr.
-----------------------
Print Name: B. Kenneth Burton Jr.
Title: Vice President
CALYON NEW YORK BRANCH
By: /s/ Charles Heidsieck
-----------------------
Print Name: Charles Heidsieck
Title: Managing Direcotr
-and-
By: /s/ Douglas J. Wier
-----------------------
Print Name: Douglas J. Wier
Title: Direcotr
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HARRIS TRUST AND SAVINGS BANK
By: /s/ Mark Piekos
-----------------------
Print Name: Mark Piekos
Title: Director
NORDEA BANK FINLAND PLC, NEW YORK BRANCH
By: /s/ Henrik Steffenson
-----------------------
Print Name: Henrik Steffenson
Its: First Vice President
-and-
By: /s/ Gerald E. Chelius
-----------------------
Print Name: Gerald E. Chelius
Its: Senior Vice President - Credit
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Joseph G. Moran
-----------------------
Print Name: Joseph G. Moran
Title: Managing Director
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SUNTRUST BANK
By: /s/ William D. Priester
-----------------------
Print Name: William D. Priester
Title: Director
THE BANK OF NEW YORK
By: /s/ William Barnum
-----------------------
Print Name: William Barnum
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK INTERNATIONAL",
NEW YORK BRANCH
By: /s/ Robert M. Mandula
-----------------------
Print Name: Robert M. Mandula
Title: Managing Director
By: /s/ Rebecca O. Morrow
-----------------------
Print Name: Rebecca O. Morrow
Title: Executive Director
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