Item 1.01. Entry into a Material Definitive Agreement.
The information set forth below under Item 1.03 of this Current Report on Form 8-K regarding the Restructuring Support Agreement and the DIP Credit Agreements (each defined below) is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
Effective
Item 1.03. Bankruptcy or Receivership.
Chapter 11 Filing
On
The Company Parties continue to operate their business and manage their
properties as "debtors-in-possession" under the jurisdiction of the
Restructuring Support Agreement
On
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represent holders of at least a majority of the aggregate principal amount of the Company Parties' debt obligations under various debt agreements.
Under the Restructuring Support Agreement, the Consenting Stakeholders have agreed, subject to certain terms and conditions, to support a financial restructuring (the "Restructuring") of the existing debt of, existing equity interests in, and certain other obligations of the Company Parties, pursuant to a prearranged plan of reorganization (the "Plan") to be filed in the Chapter 11 Cases.
The Plan will be implemented in accordance with the Restructuring Support Agreement and that certain restructuring term sheet (the "Restructuring Term Sheet"), attached to and incorporated into the Restructuring Support Agreement (such transactions described in, and in accordance with, the Restructuring Support Agreement and the Restructuring Term Sheet, the "Restructuring Transactions") which, among other things, contemplates:
•a
•a
Item 2.01. Completion or Acquisition or Disposition of Assets.
On
The Purchase Agreement contains customary indemnification obligations of each party with respect to breaches of their respective representations, warranties and covenants, and certain other specified matters, which are subject to certain exceptions, terms and limitations described further in the Purchase Agreement. The Company agreed to non-competition obligations with respect to respiratory products for a five-year period following the Transaction, which are more fully described in the Purchase Agreement. In addition, the Company entered into a supply agreement and a transition services agreement with the Purchaser to provide for, among other matters, the ongoing parts and service and support for the warranty and non-warranty service of respiratory products in the field.
A copy of the Purchase Agreement is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated in this Item 2.01 by reference. The foregoing description of the Purchase Agreement is a summary, does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement.
On
Item 2.02. Results of Operations and Financial Condition.
On
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.03 of this Current Report on Form 8-K regarding the DIP Credit Agreements is incorporated herein by reference.
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Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The filing of the Chapter 11 Cases constitutes an event of default that accelerated the Company's obligations under its outstanding (i) 5.68% Convertible Senior Secured Notes due 2026, Tranche I (the "Tranche I Secured Notes"), (ii) 5.68% Convertible Senior Secured Notes due 2026, Tranche II (the "Tranche II Secured Notes"), (iii) 5.00% Convertible Senior Exchange Notes due 2024 (the "2024 Notes, Series I"), (iv) 5.00% Series II Convertible Senior Exchange Notes due 2024 (the "2024 Notes, Series II"), (v) 4.25% Convertible Senior Exchange Notes due 2026 (the "2026 Notes") and (vi) the Company's outstanding prepetition term loan facility ("the Prepetition Term Loan Agreement") and the Company's outstanding prepetition revolving credit facility (the "Prepetition ABL Agreement" and together with the Term Loan Agreement, the "Prepetition Credit Agreements").
As of the Petition Date, the Company had an aggregate of (i)
Item 7.01. Regulation FD Disclosure.
Press Release
On
Cleansing Material
Prior to the commencement of the Chapter 11 Cases, and in connection with discussions with certain of the Company's debt holders with respect to potential strategic or capital markets transactions to enhance the Company's capital structure, the Company entered into confidentiality agreements (collectively, the "NDAs") in which the Company agreed to publicly disclose certain information, including material non-public information thereunder (the "Cleansing Materials"), upon the occurrence of certain events set forth in the NDAs. The Company is furnishing the Cleansing Materials as Exhibit 99.2 hereto in satisfaction of its obligations under the NDAs.
Additional Information on the Chapter 11 Cases
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Court filings and information about the Chapter 11 Cases can be found at a website maintained by the Company's claims agent Epiq at http://dm.epiq11.com/Invacare. The documents and other information available via website or elsewhere are not part of this Current Report and shall not be deemed incorporated therein.
The information furnished in this Item 7.01 of this Current Report on Form 8-K, the press release attached hereto as Exhibit 99.1 and the Cleansing Materials attached hereto as Exhibit 99.2 shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 8.01. Other Events.
In connection with entry into the DIP Credit Agreements, the Company also entered into (i) an amendment to the Prepetition Term Loan Agreement to permit entry into the DIP Credit Agreements and (ii) an intercreditor agreement (the "Intercreditor Agreement") among the finance parties under the finance parties under the DIP Credit Agreements and the finance parties under the Prepetition Credit Agreements and the finance parties under the indentures described below.
Cautionary Note Regarding the Company's Common Shares
The Company cautions that trading in the Company's securities (including, without limitation, the Company's common shares) during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company's securities may bear little or no relationship to the actual recovery, if any, by holders of the Company's securities in the Chapter 11 Cases. The Company expects that holders of shares of the Company's common shares could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 Cases.
Further, the Cleansing Materials described above were not prepared with a view toward public disclosure and should not be relied upon to make an investment decision with respect to the Company. The Cleansing Materials include certain potential values for illustrative purposes only and such values are not the result of, and do not represent, actual valuations, estimates, forecasts or projections by any third party, the Company or its subsidiaries and should not be relied upon as such. Neither the Company nor any third party has made or makes any representation to any person regarding the accuracy of the Cleansing Materials or the ultimate outcome of any potential restructuring transaction, and none of them undertakes any obligation to publicly update the Cleansing Materials to reflect circumstances existing after the date when the Cleansing Materials were prepared or conveyed or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Cleansing Materials are shown to be in error.
Cautionary Statement Concerning Forward-Looking Statements
Statements contained in this Current Report on Form 8-K that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "could," "may," "might," "should," "will" and similar words. Forward-looking statements are based on management's current expectations, beliefs, assumptions and estimates and may include, for example, statements regarding the Chapter 11 Cases, the DIP Credit Agreements, the Company's ability to consummate and complete a plan of reorganization and its ability to continue operating in the ordinary course while the Chapter 11 Cases
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are pending. These statements are subject to significant risks, uncertainties,
and assumptions that are difficult to predict and could cause actual results to
differ materially and adversely from those expressed or implied in the
forward-looking statements, including risks and uncertainties regarding the
Company's ability to successfully complete a restructuring under Chapter 11;
consummation of a plan of reorganization; potential adverse effects of the
Chapter 11 Cases on the Company's liquidity and results of operations; the
Company's ability to obtain timely approval by the
Forward-looking statements are also subject to the risk factors and cautionary
language described from time to time in the reports the Company files with the
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description of Exhibit 2.1 Asset Purchase Agreement withVentec Life Systems, Inc. 10.1 Restructuring Support Agreement, dated as ofJanuary 31, 2023 , by and among the Company Parties and the Consenting Stakeholders. 10.2 Backstop Commitment Agreement, dated as ofJanuary 31, 2023 , by and among the Company Parties and the backstop parties thereto. 99.1 Press Release, datedFebruary 1, 2023 . 99.2 Cleansing Materials 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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