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SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT, dated as of February
27, 1997 (this "Amendment"), is among INVACARE CORPORATION, an Ohio corporation
(the "Company"), each of the Subsidiaries of the Company designated under the
Loan Agreement (as described below) as a Borrowing Subsidiary (the "Borrowing
Subsidiaries" and together with the Company, the "Borrowers" and each a
"Borrower"), the banks set forth on the signature pages hereof (collectively,
the "Banks") and NBD BANK, a Michigan banking corporation, as agent for the
Banks (in such capacity, the "Agent").
RECITALS
A. The Borrowers, the Agent and the Banks are parties to a
Loan Agreement, dated as of December 20, 1994, as amended by a First Amendment
to Loan Agreement dated as of July 31, 1996 (as now and hereafter amended, the
"Loan Agreement"), pursuant to which the Banks agreed, subject to the terms and
conditions thereof, to extend credit to the Borrowers.
B. The Borrowers desire to amend the Loan Agreement
and the Agent and the Banks are willing to do so 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 I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Loan Agreement shall be amended as follows:
1.1. Section 1.1 shall be amended as follows:
(a) The definition of "Applicable Margin" shall be deleted and the
following shall be inserted in place thereof:
"Applicable Margin" shall mean with respect
to any Floating Rate Loan, Interbank Offered Rate
Loan, S/L/C fee payable pursuant to Section 2.5(b)
and facility fee payable pursuant to Section 2.5(a),
as the case may be, the applicable percentage set
forth in the applicable table below as adjusted on
the date on which the financial statements and
compliance certificate required pursuant to Section
5.1(d) are delivered to the Banks and shall remain in
effect until the next change to be effected pursuant
to this definition, provided, that, if any financial
statements referred to above are not delivered within
the time period specified above, then, until the
financial statements are delivered, the ratio of
Funded Debt to Total Capitalization as of the end of
the fiscal quarter that would have been covered
thereby shall for the purposes of this definition be
deemed to be greater than or equal to 0.58 to 1.0:
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Applicable Margin
========================= ----------------------- --------------------------- ------------------ ===================
Funded Debt to Total Floating Rate Interbank Offered S/L/C Fee Facility Fee
Capitalization Loan Rate Loan
========================= ----------------------- --------------------------- ------------------ ===================
Less than 0.40:0:1.0 0.00% 0.185% 0.185% 0.09%
========================= ----------------------- --------------------------- ------------------ ===================
Greater than or equal 0.00% 0.25% 0.25% 0.125%
to 0.40:0:1.0 but less
than 0.50:1.0
========================= ----------------------- --------------------------- ------------------ ===================
Greater than or equal 0.00% 0.30% 0.30% 0.15%
to 0.50:1.0 but less
than 0.58:1.0
========================= ======================= =========================== ================== ===================
Greater than or equal 0.00% 0.45% 0.45% 0.20%
to 0.58:1.00
========================= ======================= =========================== ================== ===================
(b) The definition of "Applicable Lending Office" shall be deleted and the
following shall be inserted in place thereof:
"Applicable Lending Office" shall mean, with
respect to any Advance made by any Bank or with
respect to such Bank's Commitment, the office of such
Bank or of any Affiliate of such Bank located at the
address specified as the applicable lending office
for such Bank set forth next to the name of such Bank
in the signature pages hereof or any other office or
Affiliate of such Bank or of any Affiliate of such
Bank hereafter selected and notified to the Company
and the Agent by such Bank. Unless the Agent shall
notify the Treasury Manager otherwise, the Applicable
Lending Office of the Agent shall be: (a) with
respect to all Advances denominated in Dollars, the
principal office of the Agent in Detroit, Michigan;
(b) with respect to Advances denominated in CAD, the
main office of First Chicago NBD Bank, Canada, an
Affiliate of the Agent, in Toronto, Ontario; (c) with
respect to all Advances denominated in AUD or NZD,
the branch of FNBC in Adelaide, Australia and (d)
with respect to all other Advances, the branch of
FNBC in London, England.
(c) The definition of "Cumulative Net Income" shall be deleted in its
entirely.
(d) The definition of "Required Banks" shall be amended by deleting the
references therein to "sixty-six and two-thirds percent" and inserting "sixty
percent" in place thereof.
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(e) The following definitions shall be added in appropriate alphabetical
order:
"Consolidated Net Income" of any person shall mean,
for any period, the net income (after deduction for
income and other taxes of such person determined by
reference to income or profits of such person) for
such period (but without reduction for any net loss
incurred for any fiscal year during such period),
all as determined in accordance with generally
accepted accounting principles.
"FNBC" shall mean The First National Bank of
Chicago, an Affiliate of the Agent.
"1997 Loan Agreement" shall mean the loan agreement
dated as of February 27, 1997 among the Company, the
Borrowing Subsidiaries party thereto, the banks
party thereto, and NBD Bank, as agent, as amended,
modified, refinanced or replaced from time to time.
1.2 A new Section 3.9 shall be added to the Loan
Agreement at the end of Article III to read as follows:
3.9 Right of Banks to Fund Through Other
Offices. Each Bank may perform its Commitment to
fund its pro rata share of any Loan or, with respect
to the Agent, any Swing Line Loan to the Borrowers
by causing an affiliate of such Bank to provide such
funds in accordance with the terms of this
Agreement. For all purposes of this Agreement, any
amounts so advanced shall be deemed to have been
advanced by such Bank, and the obligation of the
Borrowers to repay such amounts shall be as provided
in this Agreement.
1.3 Section 4.8 shall be amended by adding the following
language at the end thereof: "except where the failure to obtain such consents,
approvals, authorizations, declarations, registrations or filings would not have
a material adverse effect on the Company and its Subsidiaries, taken as a
whole".
1.4 Sections 5.2(a), (b) and (c) shall be deleted and
the following shall be inserted in place thereof:
(a) Interest Coverage Ratio. Permit or suffer the
Interest Coverage Ratio to be less than (i) during
any quarter in which the ratio of Consolidated Funded
Debt of the Company and its Subsidiaries to
Consolidated Total Capitalization of the Company and
its Subsidiaries is greater than 0.58 to 1.00 but
less than 0.68 to 1.00, 2.25 to 1.0 and (ii) at all
other times, 3.0 to 1.0; in each case calculated as
of the end of each fiscal quarter for the four
immediately preceding fiscal quarters.
(b) Net Worth. Permit or suffer Consolidated Net
Worth of the Company and its Subsidiaries at any time
to be less than (i) $200,000,000 plus (ii) 50% of the
Consolidated Net Income of the Company and its
Subsidiaries for each fiscal year of the Company,
commencing on (A) if the Merger (as defined in the
1997 Loan Agreement) occurs or the aggregate amount
of Loans outstanding under the 1997 Loan Agreement
exceed $100,000,000 on or before December 31, 1997,
in either case, the fiscal year ending December 31,
1997; provided, that, the Company shall not be
required to include any net income of the Company,
its Subsidiaries or Healthdyne (as defined in the
1997 Loan Agreement) prior to the Merger or (B) in
any other case, the fiscal year ending December 31,
1998, provided that, if such Consolidated Net Income
is negative for any fiscal year, then the amount
added for such fiscal year shall be zero and shall
not reduce the amount added for any other fiscal
year.
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(c) Funded Debt to Total Capitalization. Permit or
suffer the ratio of Consolidated Funded Debt of the
Company and its Subsidiaries to Consolidated Total
Capitalization of the Company and its Subsidiaries to
exceed .68 to 1.0 at any time, decreasing to .65 to
1.0. on the earlier of (A) the date which is nine (9)
months after the date of the Merger (as defined in
the 1997 Loan Agreement), or (B) the date which is
nine (9) months after the date on which the aggregate
amount of Loans (as defined in the 1997 Loan
Agreement) outstanding under the 1997 Loan Agreement
exceed $100,000,000.
1.5 Section 5.2(d) shall be amended by replacing the "." at
the end of clause (vii) with "; and" and adding a new clause (viii) at the end
of Section 5.2(d) to read as follows:
(viii) Liens assumed by the Company or any Subsidiary
on the assets of Healthdyne (as defined in the 1997
Loan Agreement) in connection with the Healthdyne
Acquisition (as defined in the 1997 Loan Agreement).
1.6 Section 6.1 shall be amended by replacing the "." at the
end of Section 6.1(j) with ":or" and adding a new Section 6.1 (k) to read as
follows:
(k) 1997 Loan Agreement. The occurrence of any Event
of Default (as defined in the 1997 Loan Agreement)
under the 1997 Loan Agreement.
1.7 Section 8.6(d) shall be amended by deleting the reference
therein to "(which consent may be withheld in the sole discretion of the
Company)" and inserting the following language immediately after the reference
in line two to "Agent": "(which consent, in each case, will not be
unreasonably withheld)".
1.8 The forms of Schedules 1.1(a), 4.4, 4.5, 4.12 and 5.2
attached to the Loan Agreement shall be replaced with the forms of such
Schedules attached hereto.
ARTICLE II. 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.
2.2 This Amendment is the legal, valid and binding obligation
of the 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 Loan 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 any event or condition which might
become an Event of Default with notice or lapse of time, or both, exists or has
occurred and is continuing on the date hereof.
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ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not become
effective until each of the following has been satisfied:
3.1 This Amendment shall be signed by the Borrowers, the Agent
and the Banks.
3.2 The Company shall have requested a Loan (as defined in
the 1997 Loan Agreement) under the 1997 Loan Agreement.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Loan Agreement or in any note,
certificate, instrument or other document to the "Loan Agreement" shall be
deemed to be references to the Loan Agreement as amended hereby and as further
amended from time to time.
4.2 The Company 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.
4.3 Each Borrower acknowledges and agrees that the Agent and
the Banks have fully performed all of their obligations under all documents
executed in connection with the Loan Agreement and all actions taken by the
Agent and the Banks are reasonable and appropriate under the circumstances and
within their rights under the Loan 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.
4.4 Except as expressly amended hereby, each Borrower agrees
that the Loan Agreement, the Notes, the Security Documents and all other
documents and agreements executed by the Company in connection with the Loan
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 Loan Agreement.
4.5 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 February 27, 1997.
INVACARE CORPORATION
By:/S/ Xxxxxx X Xxxxxxx
-----------------------
Its Chief Financial Officer
----------------------------
INVACARE INTERNATIONAL CORPORATION
By:/S/ Xxxxxx X Xxxxxxx
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Its Treasurer and Secretary
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INVACARE (UK) LIMITED
By:/S/ Xxxxxx X Xxxxxxx
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Its Director
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INVACARE CANADA INC.
By:/S/ Xxxxxx X Xxxxxxx
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Its Treasurer and Secretary
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QUANTRIX CONSULTANTS LIMITED
By:/S/ A. Xxxxxxx Xxxxx, III
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Its Director
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DYNAMIC CONTROLS LIMITED
By:/S/ A. Xxxxxxx Xxxxx, III
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Its Director
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REHADAP S.A.
By:/S/ Xxxxxx X Xxxxxxx
-----------------------
Its POA for Xxxxxx Juranville, President
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INVACARE (DEUTSCHLAND) GmbH
By:/S/ Xxxxxx X Xxxxxxx
-----------------------
Its POA for Wubbe Berkenbosch, General Manager
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BENCRAFT LIMITED
By:/S/ Xxxxxx X Xxxxxxx
-----------------------
Its Director
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KUSCHALL DESIGN AG, formerly known as
Paratec AG
By: /S/ Xxxxxx X. Xxxxxx
------------------------
Its President
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INVACRE AUSTRALIA PTY. LTD.
By:/S/ Xxxxxx X Xxxxxxx
-----------------------
Its Director
------------------------
XXXXXXX GROUPE INVACARE
By:/S/ Xxxxxx X Xxxxxxx
-----------------------
Its POA for Xxxxxx Juranville, President
-----------------------------------------
NBD BANK, as Agent and Individually as a Bank
By:/S/ Xxxxxxxx X. Xxxxx
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Its First Vice President
-----------------------------------
NATIONAL CITY BANK
By:/S/ Xxxxxxx X. XxXxxx
-----------------------------------
Its Vice President
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KEYBANK NATIONAL ASSOCIATION,
formerly known as Society National Bank
By:/S/ Xxxxxx X. Xxxxxxx
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Its Vice President
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SOCIETE GENERALE
By:/S/ Xxxxxx X. Xxxxxxx
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Its Vice President
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SUN TRUST BANK, CENTRAL FLORIDA, N.A.,
formerly known as SunBank,
National Association
By:/S/ Xxxxx X. Xxxxxxx
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Its Vice President
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