Exhibit 10.1
AMENDMENT #1 TO RECEIVABLES PURCHASE AGREEMENT
THIS
AMENDMENT #1 TO RECEIVABLES PURCHASE AGREEMENT, dated as of September
28, 2006 (this "Amendment"), is by and among Invacare Receivables
Corporation, a
Delaware corporation
("Seller"),
Invacare Corporation, an Ohio corporation
("Invacare"), as
initial Servicer (the
Servicer, together with Seller, the
"Seller Parties" and each, a "Seller Party"), the entities listed on Schedule
A
to this Agreement (together with any of their respective
successors and
assigns
hereunder, the "Financial Institutions"), Park Avenue Receivables Company,
LLC
("Conduit") and JPMorgan Chase Bank, N.A., as agent for the
Purchasers hereunder
or any successor agent
hereunder (together with its successors and assigns
hereunder, the
"Agent"), and pertains
to the Receivables
Purchase
Agreement,
dated as of September
30, 2005 among the
parties (the "Existing
Agreement").
Unless defined elsewhere herein, capitalized terms used in this
Amendment shall
have the meanings assigned to such terms in the Existing
Agreement.
W I T N E S S E T H:
WHEREAS, the parties
desire to amend the Existing Agreement as hereinafter
set forth.
NOW,
THEREFORE,
in consideration of
the premises and the mutual covenants
herein contained, and for other good and valuable consideration,
the receipt and
sufficiency of which
are hereby
acknowledged,
the parties hereby agree as
follows:
1.
Amendments.
(a)
Each of the following
definitions in the Existing Agreement is hereby
amended and restated in its entirety to read, respectively, as
follows:
"Dilution Horizon
Ratio" means, as of any Cut-off Date, a ratio
(expressed as a
decimal), computed by dividing (a) the sum of (i) the
aggregate amount of
Receivables generated
by the Originators
during the
current Calculation
Period plus (ii) the
aggregate amount of
Receivables
generated by the Originators during the prior Calculation Period, by (b)
the
Net Receivables Balance.
"Dilution Stress Factor" means (a) at any time the Servicer's ratio
of
Total Debt to
Adjusted EBITDA is less than 3.0, 1.75, (b) at any time
between September 28,
2006 and November 30, 2006 until the Agent otherwise
notifies the Seller
Parties, 1.75, and (c) at any other time unless
the
Agent otherwise notifies the Seller Parties, 2.00.
"Liquidity Termination
Date" means
November 30, 2006 or such later
date
as extended pursuant to the terms of this Agreement.
"Loss Ratio" means, as of any Cut-Off Date, the ratio (expressed as a
percentage) computed
by dividing (a) the sum of (i) the total Outstanding
Balance of Defaulted
Receivables plus (ii) the amount of Receivables which
became Charged-Off Receivables before becoming Defaulted
Receivables during
the
Calculation
Period that includes
such Cut-Off
Date, plus (iii) the
amount of Receivables that were converted to notes receivable or
Collection
<page>
Receivables before
becoming Defaulted
Receivables during the
Calculation
Period that
includes such Cut-Off Date, by (b) the aggregate sales
generated by the Originators during the Calculation
Period occurring six
months prior
to the Calculation Period ending on such Cut-Off Date;
provided, however, that at any time while Invacare's ratio of Total
Debt to
Adjusted EBITDA is
less than 3.00 and at all times between September 28,
2006
and November 30, 2006
until the Agent
otherwise notifies the
Seller
Parties, only 80% of the amount described in clause (a)(i) shall be
counted
for
purposes of computing the Loss Ratio.
(b)
Clause (xv) of the definition of "Eligible Receivable" is hereby
amended and restated in its entirety to read as follows:
(xv) which
is not subject to any right of rescission, set-off,
counterclaim,
any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable
Originator or any other Adverse Claim, and the Obligor thereon holds no
right as against such Originator to cause such Originator to
repurchase the
goods or merchandise
the sale of which shall have given rise to such
Receivable (except
with respect to sale discounts effected pursuant to the
Contract, or defective
goods returned in
accordance with the terms of the
Contract); provided
that (a) if such
dispute, offset, counterclaim or
defense affects
only a portion of the Outstanding Balance of such
Receivable, then such
Receivable may be
deemed an Eligible
Receivable to
the
extent of the
portion of such Outstanding Balance which
