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1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
----------------------------------------
Commission File Number 0-12938
Invacare Corporation
(Exact name of registrant as specified in its charter)
Ohio 95-2680965
---- ----------
(State or other jurisdiction of (IRS Employer Identification No)
incorporation or organization)
899 Cleveland Street, P.O. Box 4028, Elyria, Ohio 44036
-------------------------------------------------------
(Address of principal executive offices)
(216) 329-6000
--------------
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if change since
last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 12 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
As of November 8, 1996 the Company had 27,953,328 Common Shares and
1,441,767 Class B Common Shares outstanding.
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2
INVACARE CORPORATION
INDEX
Part I. FINANCIAL INFORMATION: Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet -
September 30, 1996 and December 31, 1995...................................3
Condensed Consolidated Statement of Earnings -
Three and Nine Months Ended September 30, 1996 and 1995....................4
Condensed Consolidated Statement of Cash Flows -
Nine Months Ended September 30, 1996 and 1995..............................5
Notes to Condensed Consolidated Financial
Statements - September 30, 1996............................................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..............................7
Part II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K.................................11
SIGNATURES................................................................11
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
INVACARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheet - (unaudited)
September 30, December 31,
1996 1995
ASSETS (In thousands)
- - ------ -----------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 5,051 $ 4,132
Marketable securities 3,415 2,437
Trade receivables, net 98,541 93,592
Installment receivables, net 47,401 37,074
Inventories 79,642 54,468
Deferred income taxes 7,944 6,831
Other current assets 4,946 6,151
---------- ----------
TOTAL CURRENT ASSETS 246,940 204,685
OTHER ASSETS 42,953 36,581
PROPERTY AND EQUIPMENT, NET 74,911 65,078
GOODWILL, NET 123,278 102,406
---------- ----------
TOTAL ASSETS $488,082 $408,750
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 43,064 $ 33,805
Accrued expenses 46,351 45,097
Accrued income taxes 1,491 5,821
Current maturities of long-term obligations 228 213
---------- ----------
TOTAL CURRENT LIABILITIES 91,134 84,936
LONG-TERM OBLIGATIONS 168,843 122,456
DEFERRED INCOME TAXES 704 39
SHAREHOLDERS' EQUITY
Preferred shares 0 0
Common shares 7,086 6,148
Class B common shares 360 1,243
Additional paid-in-capital 70,357 66,890
Retained earnings 155,413 130,100
Adjustment to shareholders' equity 490 993
Treasury shares (6,305) (4,055)
----------- ----------
TOTAL SHAREHOLDERS' EQUITY 227,401 201,319
----------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $488,082 $408,750
=========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
INVACARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Earnings - (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
--------------------------------------------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $158,146 $130,547 $451,776 $360,577
Cost of products sold 104,942 86,643 305,590 243,187
----------- ---------- ---------- ----------
GROSS PROFIT 53,204 43,904 146,186 117,390
Selling, general and administrative expenses 35,181 28,236 101,243 80,515
----------- ---------- ---------- ----------
INCOME FROM OPERATIONS 18,023 15,668 44,943 36,875
Interest income 2,514 1,741 7,125 5,272
Interest expense (3,091) (2,791) (8,787) (7,360)
---------- ---------- ---------- ----------
EARNINGS BEFORE INCOME TAXES 17,446 14,618 43,281 34,787
Income taxes 6,800 5,550 16,875 13,210
---------- ---------- ---------- ----------
NET EARNINGS $ 10,646 $ 9,068 $ 26,406 $ 21,577
========== ========== ========== ==========
NET EARNINGS PER SHARE $ .35 $ .30 $ .87 $ .72
========== ========== ========== ==========
DIVIDEND DECLARED PER COMMON SHARE $ .0125 $ .0125 $ .0375 $ .0375
========== ========== ========== ==========
Weighted average shares outstanding 30,453 30,104 30,387 30,012
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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5
<TABLE>
<CAPTION>
INVACARE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows - (unaudited)
Nine Months Ended
September 30,
1996 1995
------ ------
OPERATING ACTIVITIES (In thousands)
<S> <C> <C>
Net earnings $26,406 $21,577
Adjustments to reconcile net earnings to
net cash required by operating activities:
Depreciation and amortization 13,220 10,680
Provision for losses on receivables 1,507 368
Provision for deferred income taxes (341) (53)
Provision for other deferred liabilities 1,954 356
Changes in operating assets and liabilities:
Accounts receivable 980 (10,392)
Inventories (16,607) 2,579
Other assets 1,535 1,025
Accounts payable 4,884 2,000
Accrued expenses (6,517) 1,590
-------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 27,021 29,730
INVESTING ACTIVITIES
Purchases of property and equipment (15,689) (8,602)
Proceeds from sale of property and equipment 102 139
Installment sales contracts written (46,062) (32,588)
Payments received on installment sales contracts 34,779 31,534
Marketable securities purchased (1,153) (3,682)
Marketable securities sold 175 4,427
Increase in other investments (3,734) (2,133)
Business acquisitions, net of cash acquired (24,860) (17,898)
Increase in other long term assets (2,616) (3,889)
Other (1,472) 67
--------- ---------
NET CASH REQUIRED BY INVESTING ACTIVITIES (60,530) (32,625)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 121,465 37,808
Principal payments on long-term borrowings (87,007) (39,285)
Proceeds from exercise of stock options 3,522 1,232
Dividends paid (1,093) (608)
Purchase of treasury stock (2,250) (161)
---------- ---------
NET CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES 34,637 (1,014)
Effect of exchange rate changes on cash (209) 693
---------- ---------
Increase/(decrease) in cash and cash equivalents 919 (3,216)
Cash and cash equivalents at beginning of period 4,132 7,359
---------- ---------
Cash and cash equivalents at end of period $ 5,051 $ 4,143
========== =========
</TABLE>
See notes to condensed consolidated financial statements.
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6
INVACARE CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated
Financial Statements
(Unaudited)
Nature of Operations -- Invacare Corporation and its subsidiaries (the
"company") is the leading home medical equipment manufacturer in the world based
on its distribution channels, the breadth of its product line and sales. The
company designs, manufactures and distributes an extensive line of medical
equipment for the home health care, extended care and retail markets. The
company's products include standard manual wheelchairs, motorized and
lightweight prescription wheelchairs, motorized scooters, patient aids, home
care and institutional beds, low air loss therapy products, home respiratory,
ambulatory infusion pumps and seating and positioning products.
Principles of Consolidation -- In the opinion of the company, the accompanying
unaudited condensed consolidated financial statements are prepared in accordance
with generally accepted accounting principles which require management to make
estimates and assumptions that affect the amounts reported in the financial
statements. Actual results may differ from these estimates. The accompanying
financial statements include all adjustments, which were of a normal recurring
nature, necessary to present fairly the financial position of the company as of
September 30, 1996 and December 31, 1995, and the results of its operations for
the three and nine months ended September 30, 1996 and 1995 and changes in its
cash flows for the nine months ended September 30, 1996 and 1995. The results of
operations for the three and nine months ended September 30, 1996, are not
necessarily indicative of the results to be expected for the full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. These condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements contained in the company's annual financial statements and notes.
Shareholders' Equity Transactions -- In October 1995, Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123") was issued and becomes effective for fiscal years beginning after December
15, 1995. Under the new rules companies will be required to provide additional
footnote disclosures relating to stock-based awards. In accordance with SFAS
123, the company has elected to continue to apply Accounting Principles Board
Opinion No. 25 "Accounting for Stock Issued to Employees" (APB 25") in
accounting for its employee stock options. Under APB 25, if the option is fixed
and the exercise price of the underlying stock equals the market price on the
date of the grant, no compensation expense is recognized. The adoption of the
new standard will not have an effect on the company's financial condition or
results of operations.
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Statement of Cash Flows -- The company made payments (in thousands) of :
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
------ ----
<S> <C> <C>
Interest $ 7,462 $ 5,822
Income Taxes $ 21,330 $ 14,337
</TABLE>
Inventories -- Inventories consist of the following components (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -----------
<S> <C> <C>
Raw materials $ 25,912 $ 20,045
Work in process 14,838 10,898
Finished goods 38,892 23,525
------------ -----------
$ 79,642 $ 54,468
============ ===========
</TABLE>
The inventory determination under the LIFO method can only be made at the end of
each fiscal year based on the inventory levels and cost at that point,
therefore, interim LIFO determinations are based on management's estimates of
expected year-end inventory levels and costs.
Property and Equipment -- Property and equipment consist of the following (in
thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------------------------------
<S> <C> <C>
Land, buildings and improvements $ 35,639 $ 33,501
Machinery and equipment 98,196 84,662
Furniture and fixtures 11,076 8,636
Leasehold improvements 7,189 6,674
------------ -----------
152,100 133,473
Allowance for depreciation (77,189) (68,395)
------------ ----------
$ 74,911 $ 65,078
=========== ==========
</TABLE>
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
NET SALES
Net sales for the three and nine months ended September 30, 1996 increased by
21.1% and 25.3%, respectively, over the same periods a year ago. For the
quarter, acquisitions accounted for over one-half of the increase while currency
translation negatively impacted sales by less than 1%. Year to date,
acquisitions contributed slightly less than one-half of the increase with
foreign currency having a minimal negative impact. All product lines, with the
exception of low air loss therapy, had sales gains for the quarter and year to
date with personal care products, power products and standard wheelchairs
posting the largest increases. Sales increased principally due to higher unit
volumes, aided by national provider supply contracts that were completed during
1995. The volume increases were offset by the effects of a continuing
competitive pricing environment mainly in the standard and respiratory product
groups.
North American Operations
Rehab Products Group. Sales of the Rehab Products Group, which consists of the
power wheelchairs, custom manual wheelchairs and seating and positioning
business units, increased 22.4% with 3.6% of the increase for the quarter due to
the acquisition of Special Health Systems. All product lines posted sales
increases for the quarter. Year to date, Rehab group sales also increased 22.4%
with acquisitions contributing 3.7% to the increase.
Standard Products Group. Sales of the Standard Products Group, which consists of
the manual wheelchairs/patient transport, personal care, beds and low air loss
therapy business units, increased 21.4%, including the impact of the long term
care bed product acquisition which accounted for 10.3% of the increase for the
quarter. The personal care and manual wheelchairs/patient transport product
lines each posted solid sales increases with personal care sales continuing to
show significant volume gains. The sales growth for the group was positively
impacted by the national provider contracts entered into in late 1995. These
strong gains were offset by significantly reduced pricing due to the intense
competition across all product lines as well as a continuing decline in volumes
for the low air loss therapy product line as a result of changes in Medicare
reimbursement policies. Year to date, Standard Products Group sales increased
23.7% with 8.7% of the increase related to acquisitions.
Respiratory Products Group. Sales of the Respiratory Products Group, which
consists of the oxygen concentrator, aerosol therapy and associated respiratory
products and liquid oxygen business units, increased slightly for the quarter
and 18.0% for the first nine months ended September 30, 1996. The first nine
months were aided by the early first quarter introduction of the Venture Demand
Oxygen Delivery Device. Volume increases for the nine months, principally for
oxygen concentrators and aerosal therapy were substantially higher than the
reported sales gain due to the significant competitive pricing pressure being
experienced in the marketplace for this product line.
Associated Products Group. This group, consisting primarily of the company's
Canadian and New Zealand operations, aftermarket parts, ambulatory infusion pump
business and Invacare's new retail division, had a 74.1% sales increase
primarily as a result of acquisition activity. The acquisitions included
Thompson Rehab, GP Healthcare, Rollerchair, Medical Equipment Repairs Svc. Inc.,
Frohock-Stewart and Product Research Company. For the first nine months, sales
for this group increased 64.4%.
European Operations
European sales increased 11.3% with acquisitions accounting for 5.6% of that
increase. Sales increased in almost all product lines with patient aids and
power wheelchairs leading the way. Currency translation had a negative impact of
3.5% on the reported sales increase. For the nine months ended September 30,
1996, sales gain for Europe was 19.1% with 11.7% due to acquisitions. Currency
translation had a negative impact of 1.2% on the reported sales increase.
GROSS PROFIT
Gross profit as a percentage of net sales for the three and nine month periods
ending September 30, 1996 was 33.6% and 32.4%, respectively, compared to 33.6%
and 32.6% for the same periods last year. Gross profit was effected by
businesses acquired as they had margins lower than those of the company's
existing businesses. In addition, gross profit continues to reflect the impact
of competitive pricing pressures which was offset by productivity enhancements,
material cost management and cost containment initiatives.
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SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expense as a percentage of net sales for the
three and nine months ending September 30, 1996 was 22.2% and 22.4%,
respectively, compared to 21.6% and 22.3% in the same periods a year ago. The
dollar increase was $6,945,000 (24.6%) for the quarter and $20,728,000 (25.7%)
for the nine months. Acquisitions were the major contributors of the dollar
increase in both periods.
North American selling, general and administrative costs as a percent of sales,
excluding acquisitions, grew at a slower rate than sales for the quarter.
European operations' selling, general and administrative expenses, as a
percentage of sales, increased due to ongoing investments necessary to build the
infrastructure to support the company's strategy of expanding the European
product lines to mirror that of its North American operations.
INTEREST
Interest income in the three and nine months ended September 30, 1996 increased
over the same periods a year ago as a result of increased installment loan
volumes offset by a slight decline in the portfolio's effective yield rate. For
the quarter and nine months, interest expense increased due to higher average
outstanding borrowings as rates remained relatively constant for the periods
presented.
INCOME TAXES
The company had an effective tax rate of 39.0% for the three and nine months
ended September 30, 1996, compared to 38.0% in the same periods a year ago. The
higher tax rate in 1996 is due principally to a higher level of foreign taxes in
1996.
LIQUIDITY AND CAPITAL RESOURCES
The company's overall level of long-term obligations increased $46,000,000 to
$169,000,000 for the nine months ended September 30, 1996, as a result of
continued acquisition activity and increased capital expenditures. Increased
working capital needs to support the volume growth also contributed to the
increase. The company continues to maintain an adequate liquidity position to
fund its working capital and capital requirements through its cash flow from
operations and its bank lines. As of September 30, 1996 the company has
approximately $93,000,000 available under its lines of credit and under the most
restrictive covenant of its debt arrangements may borrow up to $262,000,000.
The company's financing arrangements require it to maintain certain conditions
with respect to net worth, working capital, funded debt to capitalization and
interest coverage as defined in the bank and note agreements. The company is in
compliance with all of the conditions.
CAPITAL EXPENDITURES
There were no material capital expenditure commitments outstanding as of
September 30, 1996. The company expects to invest in capital projects at a rate
that equals or exceeds depreciation and amortization in order to maintain and
improve the company's competitive position. The company estimates that capital
investments for 1996 will approximate $25 million. The company believes that its
balances of cash and cash equivalents, together with funds generated from
operations and existing borrowing capabilities will be sufficient to meet its
operating cash requirements and fund required capital expenditures for the
foreseeable future.
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CASH FLOWS
Cash flows provided by operating activities were $27 million for the nine months
ended September 30, 1996 compared to $30 million in 1995. Operating cash flow
declined in 1996 due to increased working capital requirements needed to support
the increased sales activity.
Cash flows required for investing activities increased by $28 million for the
nine months ended September 30, 1996 when compared to 1995 mainly as a result of
acquisition activity and increased installment sales activity by the Company's
financing division.
Cash flows provided by financing activities increased to $35 million for the
nine months of 1996 when compared to $1 million required in 1995 as the result
of an increase in long-term borrowings required to fund acquisitions, increased
working capital requirements and increased capital expenditure levels.
In addition to acquisition activities, the effect of foreign currency
translation may result in amounts being shown for cash flows in the Consolidated
Statement of Cash Flows that are different from the changes reflected in the
respective balance sheet captions.
DIVIDEND POLICY
On August 21, 1996, the Board of Directors for Invacare Corporation declared a
quarterly cash dividend of $.0125 per Common Share to shareholders of record as
of October 1, 1996, to be paid on October 15, 1996. At the current rate, the
cash dividend will amount to $.05 per Common Share on an annual basis.
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11
Item 5. Exhibits and Reports on Form 8-K
A Exhibits:
Official Exhibit No.
27 Financial Data Schedule
B Reports on Form 8-K: None
3(b) Code of Regulations; as submitted May 22, 1996.
10(ao) First Amendment to Loan Agreement among Invacare
Corporation and certain subsidiaries and NBD, N.A.,
as agent dated July 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INVACARE CORPORATION
By: /S/ Thomas R. Miklich
--------------------------
Thomas R. Miklich
Chief Financial Officer
Date: November 14, 1996
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1
Exhibit 3(b) Page 1 of 10
CODE OF REGULATIONS
OF
INVACARE CORPORATION
Adopted December 28, 1979
Amended and Restated as of April 7, 1984
Amended May 22, 1996
ARTICLE I
Fiscal Year
The fiscal year of the Corporation shall be the calendar year,
or such other period as the Board of Directors may designate by resolution.
ARTICLE II
Shareholders
Section 1. Meetings of Shareholders.
(a) Annual Meeting. The annual meeting of the Shareholders of
this Corporation, for the election of Directors, the consideration of financial
statements and other reports, and the transaction of such other business as may
properly be brought before such meeting, shall be held at such time on such date
within six (6) months after the close of the Corporation's fiscal year as the
Board of Directors shall designate by appropriate notice. Upon due notice there
may also be considered and acted upon at an annual meeting any matter which
could properly be considered and acted upon at a special meeting, in which case
and for which purpose the annual meeting shall also be considered as, and shall
be, a special meeting. In the event that the annual meeting is not held or if
Directors are not elected thereat, a special meeting may be called and held for
that purpose. (1701.39, 1701.38(A))
(b) Special Meeting. Special meetings of the Shareholders may be held on
any business day when called by any person or persons who may be authorized by
law to do so. Calls for special meetings shall specify the purpose or purposes
thereof, and no business shall be considered at any such meeting other than that
specified in the call therefor. (1701.40(A), 1701.41)
(c) Place of Meetings. Any meeting of Shareholders may be held at such
place within or without the State of Ohio as may be designated in the Notice of
said meeting. (1701.40(B))
(d) Notice of Meeting and Waiver of Notice.
(1) Notice. Written notice of the time, place and purposes of any meeting
of Shareholders shall be given to each Shareholder entitled thereto not less
than seven (7) days nor more than sixty (60) days before the date fixed for the
meeting and as prescribed by law. Such notice shall be given either by personal
delivery or mailed to each Shareholder entitled to notice of or to vote at such
meeting. If
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Page 2 of 10
such notice is mailed, it shall be directed, postage prepaid, to the
Shareholders at their respective addresses as they appear upon the records of
the Corporation, and notice shall be deemed to have been given on the day so
mailed. If any meeting is adjourned to another time or place, no notice as to
such adjourned meeting need be given other than by announcement at the meeting
at which such an adjournment is taken. No business shall be transacted at any
such adjourned meeting except as might have been lawfully transacted at the
meeting at which such adjournment was taken. (1701.41(A), 1701.02)
(2) Notice to Joint Owners. All notices with respect to any shares to which
persons are entitled by joint or common ownership may be given to that one of
such persons who is named first upon the books of this Corporation, and notice
so given shall be sufficient notice to all the holders of such shares.
(3) Waiver. Notice of any meeting, however, may be waived in writing by any
Shareholder either before or after any meeting of Shareholders, or by attendance
at such meeting without protest prior to the commencement thereof. (1701.42)
(e) Shareholders Entitled to Notice and to Vote. If a record date shall not
be fixed or the books of the Corporation shall not be closed against transfers
of shares pursuant to statutory authority, the record date for the determination
of Shareholders entitled to notice of or to vote at any meeting of Shareholders
shall be the close of business on the twentieth day prior to the date of the
meeting and only Shareholders of record at such record date shall be entitled to
notice of and to vote at such meeting. Such record date shall continue to be the
record date for all adjournments of such meeting unless a new record date shall
be fixed and notice thereof and of the date of the adjourned meeting be given to
all Shareholders entitled to notice in accordance with the new record date so
fixed. (1701.45(A)(C)(E))
(f) Quorum. At any meeting of Shareholders, the holders of shares entitling
them to exercise a majority of the voting power of the Corporation, present in
person or by proxy, shall constitute a quorum for such meeting; provided,
however, that no action required by law, the Articles, or these Regulations to
be authorized or taken by the holders of a designated proportion of the shares
of the Corporation may be authorized or taken by a lesser proportion. The
Shareholders present in person or by proxy, whether or not a quorum be present,
may adjourn the meeting from time to time without notice other than by
announcement at the meeting. (1701.51)
(g) Organization of Meetings:
(1) Presiding Officer. The Chairman of the Board, or in his absence, the
President, or in the absence of both of them, a Vice President of the
Corporation shall call all meetings of the Shareholders to order and shall act
as Chairman thereof. If all are absent, the Shareholders shall select a
Chairman.
(2) Minutes. The Secretary of the Corporation, or, in his absence, an
Assistant Secretary, or, in the absence of both, a person appointed by the
Chairman of the meeting, shall act as Secretary of the meeting and shall keep
and make a record of the proceedings thereat.
(h) Order of Business. The order of business at all meetings of the
Shareholders, unless waived or otherwise determined by a vote of the holder or
holders of the majority of the number of shares entitled to vote present in
person or represented by proxy, shall be as follows:
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Page 3 of 10
1. Call meeting to order.
2. Selection of Chairman and/or Secretary, if necessary.
3. Proof of notice of meeting and presentment of affidavit thereof.
4. Roll call, including filing of proxies with Secretary.
5. Upon appropriate demand, appointment of inspectors of election (1701.50)
6. Reading, correction and approval of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of
Directors.
9. Unfinished business, if adjourned meeting.
10. Consideration in sequence of all other matters set forth in the call
for and written notice of the meeting.
11. Adjournment.
(i) Voting. Except as provided by statute or in the Articles, every
Shareholder entitled to vote shall be entitled to cast one vote on each proposal
submitted to the meeting for each share held of record by him on the record date
for the determination of the Shareholders entitled to vote at the meeting. At
any meeting at which a quorum is present, all questions and business which may
come before the meeting shall be determined by a majority of votes cast, except
when a greater proportion is required by law, the Articles, or these
Regulations. (1701.44(A))
(j) Proxies. A person who is entitled to attend a Shareholders' meeting, to
vote thereat, or to execute consents, waivers and releases, may be represented
at such meeting or vote thereat, and execute consents, waivers, and releases,
and exercise any of his rights, by proxy or proxies appointed by a writing
signed by such person, or by his duly authorized attorney, as provided by the
laws of the State of Ohio. (1701.48)
(k) List of Shareholders. At any meeting of Shareholders a list of
Shareholders, alphabetically arranged, showing the number and classes of shares
held by each on the record date applicable to such meeting shall be produced on
the request of any Shareholder. (1701.37(B))
Section 2. Action of Shareholders Without a Meeting.
Any action which may be taken at a meeting of Shareholders may be taken
without a meeting if authorized by a writing or writings signed by all of the
holders of shares who would be entitled to notice of a meeting for such purpose,
which writing or writings shall be filed or entered upon the records of the
Corporation. (1701.54)
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Page 4 of 10
ARTICLE III
Directors
Section 1. General Powers.
The business, power and authority of this Corporation shall be exercised,
conducted and controlled by a Board of Directors, except where the law, the
Articles or these Regulations require action to be authorized or taken by the
Shareholders. (1071.59)
Section 2. Number, Classification, Election and Qualification of Directors.
(a) Number. The Board of Directors shall consist of not less than five nor
more than fifteen members. At any Shareholders meeting called for the purpose of
electing Directors, the Shareholders, by a vote of the holders of a majority of
the voting power represented at the meeting, may fix or change the total number
of Directors within the above limitation. In the event that the Shareholders
fail to fix or change the number of Directors, the number of Directors then
serving in office shall constitute the total number of Directors until further
changed in accordance with this Section. In addition to the authority of the
Shareholders to fix or change the number of Directors, the total number of
Directors so determined may be increased or decreased by not more than two
between Shareholders' meetings by the Board of Directors at a meeting or by
action without a meeting, and the total number of Directors as so changed shall
be the total number of Directors until further changed in accordance with this
Section. In the event that the Directors increase the total number of Directors,
the Directors who are then in office may fill any vacancy created thereby. No
reduction in the total number of Directors shall of itself have the effect of
shortening the term of any incumbent Director.
(b) Classification. The Directors shall be classified in
respect of the time for which they shall severally hold office by dividing them
into three classes, each class to be as nearly equal in number as possible.
Subject to the preceding sentence, in the event the total number of Directors
(whether determined by the Shareholders or by the Directors in accordance with
Section 2(a)) is not divisible by three (3), the extra Director or Directors
shall be assigned to a particular class or classes, at the time of election of
such Director or Directors, by the Shareholders or by the Directors, whichever
have elected the new Director or Directors. The term of any Director elected to
fill a vacancy in a class, however created, shall end at the expiration of the
term of such class and upon the election and qualification of the successor of
such Director.
(c) Election. Subject to the rights of Directors to elect additional
Directors in accordance with Section 2(a) or Section 3(d), the Directors of the
appropriate class shall be elected at the Annual Meeting of Shareholders, or if
not so elected, at a Special Meeting of Shareholders called for that purpose.
The Directors to be elected at each such Annual or Special Meeting of
Shareholders shall be the class whose term of office then expires; provided,
however that the Shareholders may, in their discretion, also elect Directors to
fill any vacancies in other classes without regard to how such vacancies were
created. At any meeting of Shareholders at which Directors are to be elected,
only persons nominated as candidates shall be eligible for election, and the
candidates receiving the greatest number of votes shall be elected.
<PAGE>
5
Page 5 of 10
(d) Qualification. Directors need not be Shareholders of the Corporation.
Section 3. Term of Office of Directors.
(a) Term. The term of office of each class of Directors shall be three (3)
years (so that the term of one class of Directors shall expire each year), and
the Directors shall hold office for the respective terms to which elected and
until their respective successors are elected and qualified, subject only to
prior resignation, death or removal by the Directors as provided by law, and
subject to the provisions of the Articles.
(b) Removal. Other than as heretofore stated, no Director may be removed
from office except for cause. With prior notice thereof, all the Directors or
all the Directors of a particular class, or any individual Director may be
removed for cause by a majority vote at any Special Meeting of Shareholders
properly called for that purpose, provided that unless all the Directors, or all
the Directors of a particular class, are removed, no individual Director shall
be removed in case the votes of a sufficient number of shares are cast against
his removal which, if cumulatively voted at an election of all the Directors, or
all the Directors of a particular class, as the case may be, would be sufficient
to elect at least one Director.
(c) Resignation. A resignation from the Board of Directors shall be deemed
to take effect immediately or at such other time as the Director may specify.
(d) Vacancy. If any vacancy shall occur in the Board of Directors by death,
resignation or as provided by law, the Articles or these Regulations, the
remaining Directors shall constitute the Board of Directors until such vacancy
is filled. The remaining Directors may fill any vacancy in the Board for the
unexpired term.
Section 4. Meetings of Directors.
(a) Regular Meetings. A regular meeting of the Board of Directors shall be
held immediately following the adjournment of the annual meeting of the
Shareholders or a special meeting of the Shareholders at which Directors are
elected. The holding of such Shareholders' meeting shall constitute notice of
such Directors' meeting and such meeting may be held without further notice.
Other regular meetings shall be held at such other times and places as may be
fixed by the Directors. (1701.61)
(b) Special Meetings. Special meetings of the Board of Directors may be
held at any time upon call of the Chairman of the Board, the President, any Vice
President, or any two Directors. (1701.61(A))
(c) Place of Meeting. Any meeting of Directors may be held at any place
within or without the State of Ohio in person and/or through any communications
equipment if all persons participating in the meeting can hear each other.
(1701.61(B))
(d) Notice of Meeting and Waiver of Notice. Notice of the time and place of
any regular or special meeting of the Board of Directors (other than the regular
meeting of Directors following the adjournment of the annual meeting of the
Shareholders or following any special meeting of the
<PAGE>
6
Page 6 of 10
Shareholders at which Directors are elected) shall be given to each Director by
personal delivery, telephone, mail, telegram or cablegram at least forty-eight
(48) hours before the meeting, which notice need
not specify the purpose of the meeting. Such notice, however, may be waived in
writing by any Director either before or after any such meeting, or by
attendance at such meeting (including attendance (presence) by means of
participation through any communications equipment as above provided) without
protest prior to the commencement thereof.
(1701.61(B)(C), 1701.42)
Section 5. Quorum and Voting.
At any meeting of Directors, not less than one-half of the whole authorized
number of Directors is necessary to constitute a quorum for such meeting, except
that a majority of the remaining Directors in office constitutes a quorum for
filling a vacancy in the Board. At any meeting at which a quorum is present, all
acts, questions and business which may come before the meeting shall be
determined by a majority of votes cast by the Directors present at such meeting,
unless the vote of a greater number is required by the Articles, Regulations or
By-Laws. (1701.62)
Section 6. Committees.
(a) Appointment. The Board of Directors may from time to time
appoint certain of its members (but in no event less than three) to act as a
committee or committees in the intervals between meetings of the Board and may
delegate to such committee or committees powers to be exercised under the
control and direction of the Board. Each such committee and each member thereof
shall serve at the pleasure of the Board.
(b) Executive Committee. In particular, the Board of Directors may create
from its membership and define the powers and duties of an Executive Committee.
During the intervals between meetings of the Board of Directors the Executive
Committee shall possess and may exercise all of the powers of the Board of
Directors in the management and control of the business of the Corporation to
the extent permitted by law. All action taken by the Executive Committee shall
be reported to the Board of Directors at its first meeting thereafter.
(c) Committee Action. Unless otherwise provided by the Board of Directors,
a majority of the members of any committee appointed by the Board of Directors
pursuant to this Section shall constitute a quorum at any meeting thereof and
the act of a majority of the members present at a meeting at which a quorum is
present shall be the act of such committee. Action may be taken by any such
committee without a meeting by a writing signed by all its members. Any such
committee shall prescribe its own rules for calling and holding meetings and its
method of procedure, subject to any rules prescribed by the Board of Directors,
and shall keep a written record of all action taken by it. (1701.63)
Section 7. Action of Directors Without a Meeting.
Any action which may be taken at a meeting of Directors may be taken
without a meeting if authorized by a writing or writings signed by all the
Directors, which writing or writings shall be filed or entered upon the records
of the Corporation. (1701.54)
<PAGE>
7
Page 7 of 10
Section 8. Compensation of Directors.
The Board of Directors may allow compensation for attendance at meetings or
for any special services, may allow compensation to members of any committee,
and may reimburse any Director for his expenses in connection with attending any
Board or committee meeting. (1701.60)
Section 9. Attendance at Meetings of Persons Who Are Not Directors.
Unless waived by a majority of Directors in attendance, not less than
twenty-four (24) hours before any regular or special meeting of the Board of
Directors any Director who desires the presence at such meeting of not more than
one person who is not a Director shall so notify all other Directors, request
the presence of such person at the meeting, and state the reason in writing.
Such person will not be permitted to attend the Directors' meeting unless a
majority of the Directors in attendance vote to admit such person to the
meeting. Such vote shall constitute the first order or business for any such
meeting of the Board of Directors. Such right to attend, whether granted by
waiver or vote, may be revoked at any time during any such meeting by the vote
of a majority of the Directors in attendance.
ARTICLE IV
Officers
Section 1. General Provisions.
The Board of Directors shall elect a President, a Secretary and a
Treasurer, and may elect a Chairman of the Board, one or more Vice-Presidents,
and such other officers and assistant officers as the Board may from time to
time deem necessary. The Chairman of the Board, if any, and the President shall
be Directors, but no one of the other officers need be a Director. Any two or
more offices may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required to be executed, acknowledged or verified by two or more
officers. (1701.64(A))
Section 2. Powers and Duties.
All officers, as between themselves and the Corporation, shall respectively
have such authority and perform such duties as are customarily incident to their
respective offices, and as may be specified from time to time by the Board of
Directors, regardless of whether such authority and duties are customarily
incident to such office. In the absence of any officer of the Corporation, or
for any other reason the Board of Directors may deem sufficient, the Board of
Directors may delegate for the time being, the powers or duties of such officer,
or any of them, to any other officer or to any Director. The Board of Directors
may from time to time delegate to any officer authority to appoint and remove
subordinate officers and to prescribe their authority and duties. Since the
lawful purposes of this Corporation include the acquisition and ownership of
real property, personal property and property in the nature of patents,
copyrights, and trademarks and the protection of the Corporation's property
rights in its patents, copyrights and trademarks, each of the officers of this
Corporation is empowered to execute any power of attorney necessary to protect,
secure, or vest the Corporation's interest in and to real property, personal
property and its property protectable by patents, trademarks and copyright
registration and to secure such patents, copyrights and trademark registrations.
(1701.64(B)(1))
<PAGE>
8
Page 8 of 10
Section 3. Term of Office and Removal.
(a) Term. Each officer of the Corporation shall hold office during the
pleasure of the Board of Directors, and unless sooner removed by the Board of
Directors, until the meeting of the Board of Directors following the date of
their election and until his successor is elected and qualified. (1701.64(A))
(b) Removal. The Board of Directors may remove any officer at any time,
with or without cause by the affirmative vote of a majority of Directors in
office. (1701.64(B)(2))
Section 4. Compensation of Officers.
Unless compensation is otherwise determined by a majority of the Directors
at a regular or special meeting of the Board of Directors, or unless such
determination is delegated by the Board of Directors to another officer or
officers, the President of the Corporation from time to time shall determine the
compensation to be paid to all officers and other employees for services
rendered to the Corporation. (1701.60)
ARTICLE V
Indemnification of Directors, Officers, Employees, and Others
(a) Right of Indemnification. The Corporation shall indemnify any Director,
officer, employee or other person, to the fullest extent provided by, or
permissible under, Section 1701.13(E), Ohio Revised Code; and the Corporation is
hereby specifically authorized to take any and all further action to effectuate
any indemnification of any person which any Ohio corporation may have power to
take (permissible under Section 1701.13(E)(6) or under any other statute or
under general law), by any vote of the Shareholders, vote of disinterested
Directors, by any Agreement, or otherwise. This Section of the Code of
Regulations of the Corporation shall be interpreted in all respects to expand
such power to indemnify to the maximum extent permissible to any Ohio
Corporation with regard to the particular facts of each case, and not in any way
to limit any statutory or other power to indemnify, or right of any individual
to indemnification.
(b) Insurance for Indemnification. The Corporation may purchase and
maintain insurance for protection of the Corporation and for protection of any
Director, officer, employee and/or any other person for whose protection, and to
the fullest extent, such insurance may be purchased and maintained under Section
1701.13(E)(7), Ohio Revised Code, or otherwise. Such policy or policies of
insurance may provide such coverage and be upon such terms and conditions as
shall be authorized or approved from time to time by the Board of Directors or
the Shareholders of the Corporation.
<PAGE>
9
Page 9 of 10
ARTICLE VI
Securities Held by the Corporation
Section 1. Transfer of Securities Owned by the Corporation.
All endorsements, assignments, transfers, stock powers, share powers or
other instruments of transfer of securities standing in the name of the
Corporation shall be executed for and in the name of the Corporation by the
President, by a Vice President, by the Secretary or by the Treasurer or by any
other person or persons as may be thereunto authorized by the Board of
Directors.
Section 2. Voting Securities Held by the Corporation.
The Chairman of the Board, President, any Vice President,Secretary or
Treasurer, in person or by another person thereunto authorized by the Board of
Directors, in person or by proxy or proxies appointed by him, shall have full
power and authority on behalf of the Corporation to vote, act and consent with
respect to any securities issued by other corporations which the Corporation may
own. (1701.47(A))
ARTICLE VII
Share Certificates
Section 1. Transfer and Registration of Certificates.
The Board of Directors shall have authority to make such rules and
regulations, not inconsistent with law, the Articles or these Regulations, as it
deems expedient concerning the issuance, transfer and registration of
certificates for shares and the shares represented thereby and may appoint
transfer agents and registrars thereof. (1701.14(A), 1701.26)
Section 2. Substituted Certificates.
Any person claiming that a certificate for shares has been lost, stolen or
destroyed, shall make an affidavit or affirmation of that fact and, if required,
shall give the Corporation (and its registrar or registrars and its transfer
agent or agents, if any) a bond of indemnity, in such form and with one or more
sureties satisfactory to the Board, and, if required by the Board of Directors,
shall advertise the same in such manner as the Board of Directors may require,
whereupon a new certificate may be executed and delivered of the same tenor and
for the same number of shares as the one alleged to have been lost, stolen or
destroyed. (1701.27, 1308.35)
<PAGE>
10
Page 10 of 10
ARTICLE VIII
Seal
The Directors may adopt a seal for the Corporation which shall be in such
form and of such style as is determined by the Directors. Failure to affix any
such corporate seal shall not affect the validity of any instrument.
(1701.13(B))
ARTICLE IX
Consistency with Articles of Incorporation
If any provision of these Regulations shall be inconsistent with the
Corporation's Articles of Incorporation (and as they may be amended from time to
time), the Articles of Incorporation (as so amended at the time) shall govern.
ARTICLE X
Section Headings
The headings contained in this Code of Regulations are for reference
purposes only and shall not be construed to be part of and/or shall not affect
in any way the meaning or interpretation of this Code of Regulations.
ARTICLE XI
Amendments
This Code of Regulations of the Corporation (and as it may be amended from
time to time) may be amended or added to by the affirmative vote or the written
consent of the Shareholders of record entitled to exercise a majority of the
voting power on such proposal; provided, however, that if an amendment or
addition is adopted by written consent without a meeting of the Shareholders, it
shall be the duty of the Secretary to enter the amendment or addition in the
records of the Corporation, and to mail a copy of such amendment or addition to
each Shareholder of record who would be entitled to vote thereon and did not
participate in the adoption thereof. (1701.11)
<PAGE>
1
Exhibit 10(ao) Page 1 of 8
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated as of July 31, 1996 (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 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 and facility fee, 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 Interest Coverage Ratio 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
less than 3.0 to 1.0:
<PAGE>
2
Page 2 of 8
<TABLE>
<CAPTION>
Applicable Margin
Interest Floating Interbank
Coverage Rate Offered
Ratio Loan Rate Loan S/L/C Fee Facility Fee
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Greater than
10.0:1.0 0.00% 0.14% 0.14% 0.06%
- - ---------------------------------------------------------------------------------------------
Less than or
equal to
10.0:1.0 but
greater than or
equal to 5.0:1.0 0.00% 0.18% 0.18% 0.095%
- - ---------------------------------------------------------------------------------------------
Less than
5.0:1.0 but
greater than or
equal to 3.0:1.0 0.00% 0.225% 0.225% 0.125%
- - ---------------------------------------------------------------------------------------------
Less than
3.0:1.0 0.00% 0.32% 0.32% 0.18%
- - ---------------------------------------------------------------------------------------------
</TABLE>
(b) The definition of "Bankers Acceptances" shall be deleted in its
entirety.
(c) The definition of "Canadian Domestic Rate" shall be deleted and the
following shall be inserted in place thereof:
"Canadian Domestic Rate" shall mean, with respect to any Interbank
Interest Period, the per annum interest rate which is equal to the
Agent's cost of funding an Advance in like amount and term as
determined by the Agent at 10:00 a.m. on the date of such Advance (with
calculation of such cost of funds to be provided by the Agent in
reasonable detail upon request by the Company to the Agent).
(d) The definition of "Commitment" shall be amended by deleting the last
sentence in its entirety.
(e) The definition of "Termination Date" shall be amended by deleting the
reference therein to "December 20, 2000"and inserting "July 30, 2001" in place
thereof.
1.2 Section 2.1(c) shall be amended by deleting the reference in clause
(i)(A) to "$15,000,000" and inserting "$20,000,000" in place thereof.
1.3 Section 2.1(d) shall be deleted in its entirety and the following shall
be inserted in place thereof:
<PAGE>
3
Page 3 of 8
(d) Limitation on Amount of Advances. Notwithstanding anything in this
Agreement to the contrary, the aggregate principal amount of the Revolving
Credit Advances made by any Bank at any time outstanding shall not exceed the
amount of its respective Commitment as of the date any such Advance is made,
provided, however, that the aggregate principal amount of Letter of Credit
Advances outstanding at any time shall not exceed $10,000,000.
1.4 Section 2.1(e) shall be amended by deleting each reference to
"September 30" and inserting "May 31" in place thereof and by deleting the
reference to "October 30" and inserting "June 30" in place thereof.
1.5 Section 2.5(a) shall be deleted and the following shall be inserted in
place thereof:
2.5 Fees. (a) The Company agrees to pay to the Banks a
facility fee on the daily average amount of the Commitments, for the
period from the Effective Date to but excluding the Termination Date,
at a rate equal to the Applicable Margin for the facility fee. Accrued
facility fees shall be payable quarterly in arrears in Dollars within
five (5) days of receipt of an invoice containing a computation of
facility fees due, which invoice shall be prepared by the Agent as of
the last Business Day of each March, June, September and December,
commencing on the first such Business Day occurring after the date of
this Agreement, and on the Termination Date.
1.6 Section 2.5(c) shall be deleted in its entirety.
1.7 Section 5.2(b) shall be deleted and the following shall be inserted in
place thereof:
(b) Net Worth. Permit or suffer the Consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than
$150,000,000 plus 50% of Cumulative Consolidated Net Income of the
Company and its Subsidiaries for each fiscal year of the Company
commencing with the fiscal year ending December 31, 1996.
1.8 The "Commitment Amount" and the "Initial Percentage of Total
Commitments" set forth on the signature pages to the Loan Agreement next to the
name of each Bank shall be deleted and the respective "Commitment Amount" and
"Initial Percentage of Total Commitments" set forth below shall be inserted in
place thereof: Initial Percentage Bank Commitment Amount of Total Commitments
NBD Bank $57,500,000 28.75%
National City Bank 50,000,000 25.00%
KeyBank National Association
(formerly known as
Society National Bank) 50,000,000 25.00%
Societe Generale 25,000,000 12.50%
<PAGE>
4
Page 4 of 8
Sun Trust Bank, Central
Florida, N.A. (formerly
known as SunBank, National
Association) 17,500,000 8.75%
1.9 Any and all references in the Loan Agreement to "Tranche A Commitment"
and "Tranche B Commitment" shall be deleted.
1.10 Schedules 1.1(a) and 4.4 shall be substituted in place of Schedules
1.1(a) and 4.4, respectively, attached to the Loan Agreement.
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.
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.
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.
<PAGE>
5
Page 5 of 8
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.
<PAGE>
6
Page 6 of 8
IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of July 31, 1996.
INVACARE CORPORATION
By: /S/ Thomas R. Miklich
- - ------------------------------
Its: Chief Financial Officer
INVACARE INTERNATIONAL CORPORATION
By: /S/ Thomas R. Miklich
- - -----------------------------
Its: Secretary
CARTERS (J & A) LIMITED
By: /S/ Thomas R. Miklich
- - ----------------------------
Its: Treasurer
INVACARE CANADA INC.
By: /S/ Thomas R. Miklich
- - -----------------------------
Its: Secretary/Treasurer
QUANTRIX CONSULTANTS LIMITED
By: /S/ Louis F.J. Slangen
- - -------------------------------
Its: Director
<PAGE>
7
Page 7 of 8
DYNAMIC CONTROLS LIMITED
By: /S/ Louis F.J. Slangen
- - -------------------------------
Its: Director
REHADAP S.A.
By: /S/ Frederic M. Dyevre
- - ------------------------------
Its: Director
INVACARE (DEUTSCHLAND) GmbH
By: /S/ Thomas R. Miklich
- - ----------------------------
Its: POA for Wubbe Berkenbosch, General Manager
BENCRAFT LIMITED
By: /S/ Thomas R. Miklich
- - ----------------------------
Its: Treasurer
KUSCHALL DESIGN AG, formerly known as
Paratec AG
By: /S/ Gerald B. Blouch
- - ---------------------------
Its: Director
POIRIER GROUPE INVACARE
By: /S/ Frederic M. Dyevre
- - -----------------------------
Its: Director
<PAGE>
8
Page 8 of 8
NBD BANK, as Agent and Individually as a Bank
By: /S/ Winifred S. Pinet
- - -------------------------
Its: First Vice President
NATIONAL CITY BANK
By: /S/ Michael P. McCuen
- - ----------------------------
Its: Vice President
KEYBANK NATIONAL ASSOCIATION,
formerly known as Society National Bank
By: /S/ Thomas J. Purcell
- - ----------------------------
Its: Assistant Vice President
SOCIETE GENERALE
By: /S/ Joseph A. Philbin
- - -----------------------------
Its: Vice President
SUN TRUST BANK, CENTRAL FLORIDA, N.A.,
formerly known as SunBank,
National Association
By: /S/ H.A. Pulker
- - --------------------------
Its: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,051
<SECURITIES> 3,415
<RECEIVABLES> 103,121
<ALLOWANCES> (4,580)
<INVENTORY> 79,642
<CURRENT-ASSETS> 246,940
<PP&E> 152,100
<DEPRECIATION> (77,189)
<TOTAL-ASSETS> 488,082
<CURRENT-LIABILITIES> 91,134
<BONDS> 0
0
0
<COMMON> 7,446
<OTHER-SE> 389,502
<TOTAL-LIABILITY-AND-EQUITY> 488,082
<SALES> 451,776
<TOTAL-REVENUES> 451,776
<CGS> 305,590
<TOTAL-COSTS> 305,590
<OTHER-EXPENSES> 66,062
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,662
<INCOME-PRETAX> 43,281
<INCOME-TAX> 16,875
<INCOME-CONTINUING> 26,406
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,406
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0.87
</TABLE>
