Item 1.01. Conclusion of a significant definitive agreement.
Credit agreements
Highbridge Loan Agreement
OnJuly 26, 2022 (the "Closing Date"),Invacare Corporation (the "Company") entered into a Credit Agreement (the "Highbridge Loan Agreement") with a certain fund managed byHighbridge Capital Management, LLC ("Highbridge"), as the lender (together with the other lenders from time to time party thereto, the "Lenders"),Cantor Fitzgerald Securities as administrative agent andGLAS Trust Corporation Limited , as collateral agent. Pursuant to the Highbridge Loan Agreement, the Company may borrow up to an aggregate of$104.5 million principal amount of secured term loans, including$66.5 million in initial secured term loans drawn on the Closing Date,$8.5 million in additional secured term loans to be made in a single draw subject to satisfaction of certain conditions, another$10.0 million in additional secured term loans to be made in a single draw subject to satisfaction of certain further conditions and$19.5 million in additional secured term loans to be made in a single draw subject to satisfaction of certain further conditions. The Company expects to use the proceeds of the secured term loans for working capital and general corporate purposes and to pay fees and expenses in connection with the transactions described herein. The secured term loan is scheduled to mature onJuly 26, 2026 and accrues interest at an initial annual rate of SOFR + 7.00% or a base rate plus 6.00% and after the second anniversary of the Closing Date at an annual rate of SOFR + 8.75% or a base rate plus 7.75%. The secured term loan is also subject to a springing maturity date of 91 days prior to the maturity date of certain convertible notes dueNovember 2024 if more than$20.0 million of such notes remain outstanding as of such date. The obligations under the Highbridge Loan Agreement are secured, initially, by substantially all assets of the Company and certain subsidiaries of the Company (subject to certain exceptions), subject to intercreditor agreements in connection with the ABL Credit Agreement and the Indentures, and are guaranteed on the Closing Date by certain subsidiaries of the Company inthe United States ,United Kingdom ,Canada ,France ,the Netherlands and Luxembourg. Additional collateral owned by subsidiaries of the Company in various jurisdictions will be added to the security for the secured term loan and additional subsidiaries of the Company in various jurisdictions will guarantee the obligations in connection with the post-closing draws. The Company will have the right to prepay the secured term loan at any time, subject to a prepayment premium, which in case of a prepayment before the second anniversary of the closing date is equal to the greater of (i) 1.00% of the aggregate principal amount of the secured term loan so prepaid and (ii) the excess, if any of (A) the present value as of the date of repayment of all interest that would have accrued on the secured term loan being prepaid from such date through the second anniversary of the Closing Date plus the present value as of such date of the principal amount of the secured term loan being prepaid assuming a prepayment date of the second anniversary of the Closing Date over (B) the principal amount of such secured term loan being prepaid and, after the second anniversary of the Closing Date is equal to 1.00% of the aggregate principal amount of the secured term loan so prepaid, as well as, in each case, an additional redemption fee equal to 3.00% of the aggregate principal amount of the secured term loan so prepaid. The Highbridge Loan Agreement contains customary terms and covenants, including without limitation a financial covenant to maintain a minimum liquidity of$20.0 million and negative covenants, such as limitations on indebtedness, liens, fundamental changes, asset sales, investments and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum -------------------------------------------------------------------------------- thresholds and exceptions. The Highbridge Loan Agreement also contains customary events of default, after which the secured term loan may be due and payable immediately, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, judgments against the Company and its subsidiaries, change in control and lien priority.
The foregoing description of the Highbridge Loan Agreement is qualified in its entirety by reference to the Highbridge Loan Agreement, which is filed as Schedule 10.1 to this Current Report on Form 8-K and incorporated herein by reference. .
ABL credit agreement
OnJuly 26, 2022 , the Company entered into a Second Amended and Restated Revolving Credit and Security Agreement (the "ABL Credit Agreement"), amending and restating the Company's existing Revolving Credit and Security Agreement which was originally entered into onSeptember 30, 2015 and amended onFebruary 16, 2016 ,May 3, 2016 ,September 30, 2016 ,November 30, 2016 ,June 7, 2017 ,November 13, 2019 ,May 29, 2020 ,January 15, 2021 ,March 10, 2021 andDecember 29, 2021 (the "Prior Credit Agreement"). The ABL Credit Agreement was entered into by and among the Company, certain of the Company's direct and indirect domestic and Canadian subsidiaries (together with the Company, the "Borrowers"), certain other of the Company's direct and indirect domestic and Canadian subsidiaries (the "Guarantors"), andPNC Bank, National Association ("PNC") andJPMorgan Chase Bank, N.A . (the "ABL Lenders"). PNC is the administrative agent (the "Administrative Agent") under the ABL Credit Agreement. . . .
Section 2.03. Creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant.
The information set forth in Section 1.01 of this Current Report on Form 8-K under the headings “Credit Agreements” and “Indentures and New Notes” is incorporated herein by reference.
Section 3.02. Unrecorded sales of
The information set forth in Section 1.01 of this Current Report on Form 8-K under the heading “Trust Indentures and New Notes” is incorporated herein by reference.
As described in Item 1.01 of this Current Report on Form 8-K, in connection with the Exchange, the Company agreed to issue to the Investors (i) an aggregate of 2,700,000 Common Shares (the "Exchange Shares"), (ii)$20,739,000 in aggregate principal amount of Tranche I Notes and (iii)$20,736,000 in aggregate principal amount of Tranche II Notes. OnJuly 26, 2022 , as part of the Exchange, the Company issued (i) 2,700,000 Common Shares, (ii)$15,553,000 in aggregate principal amount of Tranche I Notes and (iii)$15,553,000 in aggregate principal amount of Tranche II Notes. The offerings of the Exchange Shares, the New Notes and the Guarantees to the Investors have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Shares, the New Notes and the Guarantees were issued in reliance upon the exemption provided in Section 4(a)(2) and/or Section 3(a)(9) of the Securities Act. The New Notes will be convertible, subject to certain conditions, into cash, Common Shares or a combination of cash and Common Shares, at the Company's election (subject to, and in accordance with, the settlement provisions of the Indentures). Neither the New Notes nor the underlying Common Shares (if conversions of the New Notes are settled through delivery of Common Shares) have been registered under the Securities Act or may be offered or sold inthe United States absent registration or an applicable exemption from registration requirements. --------------------------------------------------------------------------------
Item 7.01. FD Regulation Disclosure.
On
The full text of the press release is provided as Exhibit 99.1 to this current report on Form 8-K.
————————————————– ——————————
Item 9.01. Financial statements and supporting documents.
(d) Exhibits. Exhibit Number Description of Exhibit 4.1 Indenture, dated as ofJuly 26, 2022 , by and
Between
the guarantors party thereto,Computershare Trust Company, N.A. , as trustee, andGLAS Corporation Limited , as notes collateral agent. 4.2 Form of 5.68% Convertible Senior Secured Notes due 2026, Tranche I (included as Exhibit A to the Indenture filed as Exhibit 4.1 hereto). 4.3 Form of Guarantee (included as Exhibit C to the
Deed filed as an exhibit
4.1 hereto). 4.4 Indenture, dated as ofJuly 26, 2022 , by and
Between
the guarantors party thereto,Computershare Trust Company, N.A. , as trustee, andGLAS Corporation Limited , as notes collateral agent. 4.5 Form of 5.68% Convertible Senior Secured Notes due 2026, Tranche II (included as Exhibit A to the Indenture filed as Exhibit 4.4 hereto). 4.6 Form of Guarantee (included as Exhibit C to the
Deed filed as an exhibit
4.4 hereto). 4.7 Resale Registration Rights Agreement, dated as ofJuly 26, 2022 , by and amongInvacare Corporation and the noteholders parties thereto. 10.1 Credit Agreement, dated as ofJuly 26, 2022 ,
among
the lenders party thereto,Cantor Fitzgerald
Administrative titles
agent, andGLAS Trust Corporation Limited , as
collateral agent.
10.2 Second Amended and Restated Credit Agreement,
dated
and amongInvacare Corporation , the borrowers,
guarantors and lenders party
thereto, andPNC Bank, National Association , as administrative agent. 99.1 Press Release, datedJuly 26, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
————————————————– ——————————
© Edgar Online, source