EXHIBIT 10.30.3
August 27, 2004
Allied HealthCare Products, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
RE: THIRD AMENDMENT-(REVISED)
Gentlemen:
ALLIED HEALTHCARE PRODUCTS, INC., a Delaware corporation ("BORROWER")
and LASALLE BANK NATIONAL ASSOCIATION, a national banking association ("LENDER")
have entered into that certain Loan and Security Agreement dated April 24, 2002
(the "SECURITY AGREEMENT"). From time to time thereafter, Borrower and Lender
may have executed various amendments (each an "AMENDMENT" and collectively the
"AMENDMENTS") to the Security Agreement (the Security Agreement and the
Amendments hereinafter are referred to, collectively, as the "AGREEMENT").
Borrower and Lender now desire to further amend the Agreement as provided
herein, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) The definition in Paragraph 1 of the Agreement entitled
"MAXIMUM LOAN LIMIT" shall mean Twelve Million Thirty Thousand
Eight Hundred Sixty and 25/100 Dollars ($12,030,860.25).
(b) Subsection 2(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(a) REVOLVING LOANS.
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 2
Subject to the terms and conditions of this Agreement and the
Other Agreements, during the Original Term and any Renewal
Term, Lender shall, absent the occurrence of an Event of
Default, make revolving loans and advances (the "REVOLVING
LOANS") in an amount up to the sum of the following sublimits
(the "REVOLVING LOAN LIMIT"):
(i) Up to eighty percent (80%) of the face amount (less
the maximum discounts, credits and allowances which
may be taken by or granted to Account Debtors in
connection therewith in the ordinary course of
Borrower's business) of Borrower's Eligible Accounts;
plus
(ii) Up to fifty percent (50%) of the lower of the cost or
market value of Borrower's Eligible Inventory or
Seven Million and No/100 Dollars ($7,000,000.00),
whichever is less; minus
(iii) Such reserves as Lender elects, in its reasonable
discretion, exercised in good faith, to establish
from time to time, including, without limitation, a
reserve with respect to Interest Rate Protection
Agreement Obligations;
provided, that the Revolving Loan Limit shall in no event
exceed Ten Million and No/100 Dollars ($10,000,000.00) (the
"MAXIMUM REVOLVING LOAN LIMIT") except as such amount may be
decreased by Lender following the occurrence of an Event of
Default.
The aggregate unpaid principal balance of the Revolving Loans
shall not at any time exceed the lesser of the (i) Revolving
Loan Limit minus the Letter of Credit Obligations and (ii) the
Maximum Revolving Loan Limit minus the Letter of Credit
Obligations. If at any time the outstanding
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 3
Revolving Loans exceeds either the Revolving Loan Limit or the
Maximum Revolving Loan Limit, in each case minus the Letter of
Credit Obligations, or any portion of the Revolving Loans and
Letter of Credit Obligations exceeds any applicable sublimit
within the Revolving Loan Limit, Borrower shall immediately,
and without the necessity of demand by Lender, pay to Lender
such amount as may be necessary to eliminate such excess and
Lender shall apply such payment to the Revolving Loans to
eliminate such excess.
Amounts borrowed pursuant to this subsection 2(a) may be
repaid by Borrower, and, subject to the terms and conditions
of this Agreement and the Other Agreements, reborrowed at any
time during the Original Term and any Renewal Term.
Borrower hereby authorizes Lender, in its sole discretion, to
charge any of Borrower's accounts or advance Revolving Loans
to make any payments of principal, interest, fees, costs or
expenses required to be made under this Agreement or the Other
Agreements.
A request for a Revolving Loan shall be made or shall be
deemed to be made, each in the following manner: Borrower
shall give Lender same day notice, no later than 10:30 A.M.
(Chicago time) for such day, of its request for a Revolving
Loan as a Prime Rate Loan, and at least three (3) Business
Days prior notice of its request for a Revolving Loan as a
LIBOR Rate Loan, in which notice Borrower shall specify the
amount of the proposed borrowing and the proposed borrowing
date; provided, however, that no such request may be made at a
time when there exists an Event of Default or an event which,
with the passage of time or giving of notice, will become an
Event of Default. In the event that Borrower maintains a
controlled disbursement account at Lender, each check
presented for payment against such controlled disbursement
account and any other
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 4
charge or request for payment against such controlled
disbursement account shall constitute a request for a
Revolving Loan as a Prime Rate Loan. As an accommodation to
Borrower, Lender may permit telephone requests for Revolving
Loans and electronic transmittal of instructions,
authorizations, agreements or reports to Lender by Borrower.
Unless Borrower specifically directs Lender in writing not to
accept or act upon telephonic or electronic communications
from Borrower, Lender shall have no liability to Borrower for
any loss or damage suffered by Borrower as a result of
Lender's honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on any
reports communicated to it telephonically or electronically
and purporting to have been sent to Lender by Borrower and
Lender shall have no duty to verify the origin of any such
communication or the authority of the Person sending it,
except in the event of Lender's willful misconduct or gross
negligence.
Borrower hereby irrevocably authorizes Lender to disburse the
proceeds of each Revolving Loan requested by Borrower, or
deemed to be requested by Borrower, as follows: the proceeds
of each Revolving Loan requested under Section 2(a) shall be
disbursed by Lender in lawful money of the United States of
America in immediately available funds, in the case of the
initial borrowing, in accordance with the terms of the written
disbursement letter from Borrower, and in the case of each
subsequent borrowing, by wire transfer or Automated Clearing
House (ACH) transfer to such bank account as may be agreed
upon by Borrower and Lender from time to time, or elsewhere if
pursuant to a written direction from Borrower.
(c) Subsection 4(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:
4. INTEREST, FEES, AND CHARGES.
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 5
(a) INTEREST RATE: Subject to the terms and conditions
set forth below, the Loans shall bear interest at the
per annum rate of interest of the Prime Rate plus the
Prime Margin set forth below or at the LIBOR Rate
plus the LIBOR Margin set forth below, at Borrower's
option, based on the following matrix. Initially, the
Loans shall bear interest as reflected in Level II of
the matrix from and after August 3, 2004 until the
date Borrower submits its fiscal year 2004 audited
financial statements, at which time the rate of
interest shall be reset within five (5) Business Days
of Lenders receipt and shall be tested quarterly by
Lender thereafter and, if applicable, reset by Lender
within five (5) Business Days of Lender's receipt of
Borrower's quarterly financial statements.
ALL LOANS
--------------------------------------------
FUNDED DEBT
LEVEL TO EBITDA LIBOR MARGIN PRIME MARGIN
----- ----------- ------------ ------------
I > 3.0 300 bps 0.75%
-
II >2.25 and <3.0 275 bps 0.50%
-
III >1.5 and <2.25 250 bps 0.25%
-
IV <1.5 225 bps 0.00%
"Funded Debt" shall mean, with respect to any period,
all debt of Borrower for borrowed money,
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 6
whether or not evidenced by bonds, debentures, notes
or similar instruments.
With respect to the Prime Rate Loans, the interest
rate shall increase or decrease by an amount equal to
each increase or decrease in the Prime Rate effective
on the effective date of each such change in the
Prime Rate. Interest on Prime Rate Loans shall be
payable on the last Business Day of each month in
arrears.
With respect to LIBOR Rate Loans, the interest rate
shall remain fixed for the applicable Interest
Period. "Interest Period" shall mean any continuous
period of thirty (30), sixty (60), ninety (90) days,
or one hundred eighty (180) days, as selected from
time to time by Borrower by irrevocable notice (in
writing, by telecopy, electronic mail, telex,
telegram or cable) given to Bank not less than three
(3) Business Days prior to the first day of each
respective Interest Period; provided that: (i) each
such period occurring after such initial period shall
commence on the day on which the immediately
preceding period expires; (ii) the final Interest
Period shall be such that its expiration occurs on or
before the end of the Original Term or any Renewal
Term; and (iii) if for any reason Borrower shall fail
to timely select a period, then such Loans shall
continue as, or revert to, Prime Rate Loans. Interest
shall be payable on the last Business Day of each
month and on the date of any payment hereon by
Borrower. Interest shall be payable on the last
Business Day of each month in arrears and on the last
Business Day of the applicable Interest Period.
Upon the occurrence of an Event of Default, the Loans
shall bear interest at the rate of two percent (2.0%)
per annum in excess of the interest rate otherwise
payable thereon, which interest shall be payable on
demand. All interest shall be calculated on the basis
of a 360-day year.
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 7
(d) Subparagraph (4)(b) of the Agreement is deleted in its entirety and
the following is substituted in its place.
(b) OTHER LIBOR PROVISIONS.
(i) Subject to the provisions of this Agreement,
Borrower shall have the option (A) as of any date, to
convert all or any part of the Prime Rate Loans to,
or request that new Loans be made as, LIBOR Rate
Loans of various Interest Periods; (B) as of the last
day of any Interest Period, to continue all or any
portion of the relevant LIBOR Rate Loans as LIBOR
Rate Loans; (C) as of the last day of any Interest
Period, to convert all or any portion of the LIBOR
Rate Loans to Prime Rate Loans; and (D) at any time,
to request new Loans as Prime Rate Loans; provided,
that Loans may not be continued as or converted to
LIBOR Rate Loans, if the continuation or conversion
thereof would violate the provisions of subsections
4(b)(ii) or 4(b)(iii) of this Agreement or if an
Event of Default has occurred and is continuing.
(ii) Lender's determination of the LIBOR Rate as
provided above shall be conclusive, absent manifest
error. Furthermore, if Lender determines, in good
faith (which determination shall be conclusive,
absent manifest error), prior to the commencement of
any Interest Period that (A) U.S. Dollar deposits of
sufficient amount and maturity for funding the Loans
are not available to Lender in the London Interbank
Eurodollar market in the ordinary course of business,
or (B) by reason of circumstances affecting the
London Interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the rate of
interest to be applied to the Loans requested by
Borrower to be LIBOR Rate Loans or the Loans bearing
interest at the rates set forth in subsection
4(a)(ii) of this Agreement shall not represent the
effective pricing to Lender for U.S. Dollar deposits
of a comparable amount for the relevant period (such
as for example, but not limited to, official reserve
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 8
requirements required by Regulation D to the extent
not given effect in determining the rate), Lender
shall promptly notify Borrower and (1) all existing
LIBOR Rate Loans shall convert to Prime Rate Loans
upon the end of the applicable Interest Period, and
(2) no additional LIBOR Rate Loans shall be made
until such circumstances are cured.
(iii) If, after the date hereof, the introduction of,
or any change in any applicable law, treaty, rule,
regulation or guideline or in the interpretation or
administration thereof by any governmental authority
or any central bank or other fiscal, monetary or
other authority having jurisdiction over Lender or
its lending offices (a "Regulatory Change"), shall,
in the opinion of counsel to Lender, make it unlawful
for Lender to make or maintain LIBOR Rate Loans, then
Lender shall promptly notify Borrower and (A) the
LIBOR Rate Loans shall immediately convert to Prime
Rate Loans on the last Business Day of the then
existing Interest Period or on such earlier date as
required by law, and (B) no additional LIBOR Rate
Loans shall be made until such circumstance is cured.
(iv) If, for any reason, a LIBOR Rate Loan is paid
prior to the last Business Day of any Interest Period
or if a LIBOR Rate Loan does not occur on a date
specified by Borrower in its request (other than as a
result of a default by Lender), Borrower agrees to
indemnify Lender against any loss (including any loss
on redeployment of the deposits or other funds
acquired by Lender to fund or maintain such LIBOR
Rate Loan), cost or expense incurred by Lender as a
result of such prepayment.
(v) If any Regulatory Change (whether or not having
the force of law) shall (A) impose, modify or deem
applicable any assessment, reserve, special deposit
or similar requirement against assets held by, or
deposits in or for the account of or loans by, or any
other acquisition of funds or disbursements by,
Lender with respect to Borrower; (B) subject
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 9
Lender or the LIBOR Rate Loans to any Tax or change
the basis of taxation of payments to Lender of
principal or interest due from Borrower to Lender
hereunder (other than a change in the taxation of the
overall net income of Lender); or (C) impose on
Lender any other condition regarding the LIBOR Rate
Loans or Lender's funding thereof, and Lender shall
determine (which determination shall be conclusive,
absent any manifest error) that the result of the
foregoing is to increase materially the cost to
Lender of making or maintaining the LIBOR Rate Loans
or to reduce materially the amount of principal or
interest received by Lender hereunder, then Borrower
shall pay to Lender, on demand, such additional
amounts as Lender shall, from time to time, determine
are sufficient to compensate and indemnify Lender
from such increased cost or reduced amount.
(vi) Lender shall receive payments of amounts of
principal and interest with respect to the LIBOR Rate
Loans free and clear of, and without deduction for,
any Taxes. If (A) Lender shall be subject to any Tax
in respect of any LIBOR Rate Loans or any part
thereof, or (B) Borrower shall be required to
withhold or deduct any Tax from any such amount, the
LIBOR Rate applicable to such LIBOR Rate Loans shall
be adjusted by Lender to reflect all additional costs
incurred by Lender in connection with the payment by
Lender or the withholding by Borrower of such Tax and
Borrower shall provide Lender with a statement
detailing the amount of any such Tax actually paid by
Borrower. Determination by Lender of the amount of
such costs shall be conclusive, absent manifest
error. If after any such adjustment any part of any
Tax paid by Lender is subsequently recovered by
Lender, Lender shall reimburse Borrower to the extent
of the amount so recovered. A certificate of an
officer of Lender setting forth the amount of such
recovery and the basis therefor shall be conclusive,
absent manifest error.
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 10
(vii) Each request for LIBOR Rate Loans shall be in
an amount not less than One Million and No/100
Dollars ($1,000,000.00), and in integral multiples of
One Hundred Thousand and No/100 Dollars
($100,000.00).
(viii) Unless otherwise specified by Borrower, all
Loans shall be Prime Rate Loans.
(ix) No more than five (5) Interest Periods may be in
effect with respect to outstanding LIBOR Rate Loans
at any one time.
(e) Subsection (4)(c)(ii) of the Agreement entitled "Amendment Fee" is
deleted in its entirety and the phrase "Intentionally Omitted" is substituted in
its place.
(f) Subsection (4)(c)(vi) of the Agreement is deleted in its entirety
and the following is substituted in its place:
(VI) TRANSACTION FEE: Borrower shall pay to Lender a
transaction fee of Five Hundred and No/100 Dollars
($500.00), which fee shall be fully earned by Lender
and payable to Lender upon execution of the Amendment
dated August 3, 2004.
(g) Subsection 4(c)(vii) of the Agreement is amended to add the
following provision:
(VII) EXTENSION FEE: Borrower shall pay to Lender an
extension fee of Ten Thousand and No/100 Dollars
($10,000.00), which fee shall be fully earned by
Lender and payable to Lender upon execution of the
Amendment dated August 3, 2004.
(h) The first grammatical sentence of Paragraph (10) of the Agreement
is amended as follows:
(10) ORIGINAL TERM: The date of the Original Term set
forth in paragraph 10 of the Agreement is deleted and
the date of April 24, 2007 is substituted in its
place.
ALLIED HEALTHCARE PRODUCTS, INC.
August 27, 2004
Page 11
(i) Paragraph 14(d) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(d) CAPITAL EXPENDITURE LIMITATIONS.
Borrower shall not make any Capital Expenditures if,
after giving effect to such Capital Expenditure, the
aggregate cost of all such fixed assets purchased or
otherwise acquired would exceed (i) $2,000,000.00 for
Fiscal Year ending June 30, 2005; and (ii) thereafter
$1,000,000.00 during any Fiscal Year.
2. This Amendment shall not become effective until fully executed by
all parties hereto.
3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to effectuate
the transactions contemplated hereby, the Agreement hereby is ratified and
confirmed by the parties hereto and remains in full force and effect in
accordance with the terms thereof.
LASALLE BANK NATIONAL ASSOCIATION
By
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Title
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ACKNOWLEDGED AND AGREED TO
this 27TH day of AUGUST, 2004:
ALLIED HEALTHCARE PRODUCTS, INC.
By
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XXXX X. XXXXXXXX
Title: PRESIDENT
