FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
FIFTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
is made
and entered into as of the 30th day of September, 2008, by and between ALLIED
HEALTHCARE PRODUCTS, INC., a Delaware corporation with its chief executive
office and principal place of business located at 0000 Xxxxxxxx Xxxxxx, Xx.
Xxxxx, Xxxxxxxx 00000 (the “Borrower”),
and
LASALLE BANK NATIONAL ASSOCIATION, with an office at 000 Xxxxx XxXxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000 (“Lender”).
WITNESSETH:
WHEREAS,
Lender and Borrower are parties to a certain Loan and Security Agreement dated
as of April 24, 2002, as amended by that certain First Amendment Letter
Agreement dated as of September 26, 2002, that certain Second Amendment Letter
Agreement dated as of September 26, 2003, that Third Amendment Letter Agreement
dated as of August 27, 2004, and by that certain Fourth Amendment to Loan and
Security Agreement dated as of September 1, 2005 (as amended, the “Agreement”);
and
WHEREAS,
Lender and Borrower desire to amend the Agreement upon and subject to the terms
and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the premises, the covenants, promises and
agreements hereinafter set forth, and other good and valuable consideration,
the
receipt and sufficiency of which hereby is acknowledged, the parties hereto
agree as follows:
1. Amendments
to the Agreement.
(a) Section
4(c)(i)
of
the Agreement (Unused Line Fee) is hereby deleted in its entirety and replaced
with the following:
(i) Borrower
shall pay to Lender an unused line fee (as calculated in accordance with the
grid set forth below) based on the difference between the Maximum Revolving
Loan
Limit and the average daily balance of the Revolving Loans plus the Letter
of
Credit Obligations for each quarter, which fee shall be fully earned by Lender
on the first day of each quarter and payable quarterly. Said fee shall be
calculated on the basis of a 360 day year. As of September 1, 2008, the unused
line fee shall be as reflected in Level V of the matrix and shall remain at
such
level until the date Borrower submits its September 30, 2008 financial
statements, at which time the rate of interest shall be reset (if necessary)
within five (5) Business Days of Lender’s receipt of same, and shall be tested
quarterly (on a rolling four quarter basis) by Lender thereafter and, if
applicable, reset by Lender within (5) Business Days of Lender’s receipt of
Borrower’s quarterly financial statements.
|
Level
|
Ratio
of Funded Debt to EBITDA
|
Unused
Line Fee
|
|
|
I
|
>
2.50
|
25
bps
|
|
|
II
|
>
2.00 and < 2.50
|
25
bps
|
|
|
III
|
>
1.50 and < 2.00
|
25
bps
|
|
|
IV
|
>
1.00 and < 1.50
|
20
bps
|
|
|
V
|
<
1.00
|
15
bps
|
(b) Section
9(c)
of
the Agreement (Financial Statements) is hereby deleted in its entirety and
replaced with the following:
(c) Financial
Statements.
Borrower
shall deliver to Lender the following financial information, all of which shall
be prepared in accordance with generally accepted accounting principles (except,
in the case of unaudited financial statements, for the lack of footnotes and
being subject to year-end adjustments) consistently applied, and shall be
accompanied by a compliance certificate in the form of Exhibit
B
hereto,
which compliance certificate shall include a calculation of all financial
covenants contained in this Agreement: (i) no later than forty-five (45) days
after the end of each of fiscal quarter of Borrower’s Fiscal Year, copies of
unaudited consolidated and consolidating internally prepared financial
statements including, without limitation, balance sheets, statements of income,
retained earnings, cash flows and reconciliation of surplus of Borrower for
such
calendar quarter, certified by the Chief Financial Officer of Borrower, and
(ii)
no later than one hundred twenty (120) days after the end of each of Borrower’s
Fiscal Years, audited annual consolidated and consolidating financial statements
for such Fiscal Year with an unqualified opinion by independent certified public
accountants selected by Borrower and reasonably satisfactory to Lender, which
financial statements shall be accompanied by (A) a letter from such accountants
acknowledging that they are aware that Lender is relying upon such financial
statements in connection with the exercise of its rights hereunder, provided,
that Borrower shall only be required to use its reasonable efforts exercised
in
good faith to obtain such letter; and (B) copies of any management letters
sent
to the Borrower by such accountants.
(c) Section
10
of
the Agreement (Termination; Automatic Renewal) is hereby deleted in its entirety
and replaced with the following:
10. TERMINATION;
AUTOMATIC RENEWAL.
THIS
AGREEMENT SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL SEPTEMBER 1, 2010 (THE
"ORIGINAL TERM") AND SHALL AUTOMATICALLY RENEW ITSELF FROM YEAR TO YEAR
THEREAFTER (EACH SUCH ONE-YEAR RENEWAL BEING REFERRED TO HEREIN AS A "RENEWAL
TERM") UNLESS (A) THE DUE DATE OF THE LIABILITIES IS ACCELERATED PURSUANT
TO SECTION 16 HEREOF; OR (B) BORROWER OR LENDER ELECTS TO TERMINATE THIS
AGREEMENT AT THE END OF THE ORIGINAL TERM OR AT THE END OF ANY RENEWAL TERM
BY
GIVING THE OTHER PARTY WRITTEN NOTICE OF SUCH ELECTION AT LEAST NINETY (90)
DAYS
PRIOR TO THE END OF THE ORIGINAL TERM OR THE THEN CURRENT RENEWAL TERM IN WHICH
CASE BORROWER SHALL PAY ALL OF THE LIABILITIES IN FULL ON THE LAST DAY OF SUCH
TERM.
If one
or more of the events specified in clauses (A) and (B) occurs, then
(i) Lender shall not make any additional Loans on or after the date
identified as the date on which the Liabilities are to be repaid; and
(ii) this Agreement shall terminate on the date thereafter that the
Liabilities are paid in full. At such time as Borrower has repaid all of the
Liabilities and this Agreement has terminated, (x) Borrower shall deliver to
Lender a release in the form attached as Schedule 10 hereto and made a part
hereof, of all obligations and liabilities of Lender and its officers,
directors, employees, agents, parents, subsidiaries and affiliates to Borrower,
and if Borrower is obtaining new financing from another lender, Borrower shall
deliver such lender's indemnification of Lender, in form and substance
satisfactory to Lender, for checks which Lender has credited to Borrower's
account, but which subsequently are dishonored for any reason or for automatic
clearinghouse or wire transfers not yet posted to Borrower’s account; and (y)
Lender shall execute and deliver to Borrower releases and terminations of all
liens and security interests granted hereunder. If, during the term of this
Agreement, Borrower prepays all of the Liabilities and this Agreement is
terminated, Borrower shall not be required to pay to Lender a prepayment
fee.
2
(d) Section
14(b)
of
the Agreement (Fixed Charge Coverage Ratio) is hereby deleted in its entirety
and replaced with the following:
(b) Fixed
Charge Coverage.
As
of the
last day of each fiscal quarter of Borrower, for the four-quarter period ending
on such date, Borrower shall not permit the ratio of its EBITDA to Fixed Charges
to be less than 1.10 to 1.0. With respect to the calculation of the foregoing,
the Capital Expenditures component utilized in the calculation of Fixed Charges
shall be reduced by the following amount for the fiscal quarters indicated
below:
|
Fiscal
Quarter End
|
CapEx
Reduction
|
|||
|
September
30, 2008
|
$
|
1,000,000.00
|
||
|
December
31, 2008
|
$
|
1,772,000.00
|
||
|
March
31, 2009
|
$
|
2,394,000.00
|
||
|
June
30, 2009
|
$
|
1,944,000.00
|
||
(e) Section
14(d)
of
the Agreement (Capital Expenditures Limitations) is hereby deleted in its
entirety and replaced with the following:
(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) $4,000,000.00 for the Fiscal Year ending June 30,
2009, and (ii) $2,500,000.00 during any Fiscal Year thereafter.
2. Conditions
To Execution Of This Amendment.
Any
provision contained herein or in the Agreement to the contrary notwithstanding,
Lender shall have no obligation to execute this Amendment until the following
conditions are met:
3
| (a) |
Lender
shall have first received a copy of the resolutions of Borrower,
duly
adopted at a meeting duly held authorizing the execution, delivery
and
performance of this Amendment in accordance with its terms, as certified
by the Secretary of Borrower;
|
| (b) |
All
representations and warranties made in the Agreement and herein shall
be
true and correct in all material respects as of the date hereof,
and
Borrower shall have certified the same to Lender by a duly authorized
officer;
|
| (c) |
Borrower
shall not have defaulted, or taken or failed to take any action which,
unless corrected, would give rise to a default on any of Borrower’s
obligations to Lender;
|
| (d) |
No
action or omission exists as of the date hereof which constitutes,
or
which, with the passage of time, would constitute a Default or Event
of
Default, and Borrower shall have certified the same to Lender by
a duly
authorized officer;
|
| (e) |
Borrower
shall be in compliance with all covenants of the Agreement, as
amended;
|
| (f) |
All
documents and filings necessary to maintain and perfect Lender’s security
interest in the collateral provided for in the Loan Documents shall
be in
full force and effect, and all actions necessary to maintain and
perfect
the same shall have been taken;
|
| (g) |
No
material adverse change in the financial condition of Borrower shall
have
occurred since the Closing Date;
|
| (h) |
Lender
shall have received fully executed originals of the
following:
|
| (i) |
$10,000,000.00
Amended and Restated Revolving Credit Note substantially in the form
of
Exhibit
A
attached hereto;
|
| (ii) |
A
Good Standing Certificate with respect to Borrower issued by the
Delaware
Secretary of State within thirty (30) days of the date hereof;
and
|
| (iii) |
A
Secretary’s Certificate executed by the Secretary of Borrower,
substantially in the form of Exhibit
B
attached hereto.
|
| (i) |
No
pending or threatened litigation or other proceeding or investigation
shall exist which might adversely affect, in any material fashion,
the
prospects, operation or financial condition of Borrower;
and
|
| (j) |
Borrower
shall pay the costs and expenses of Lender (including attorneys’ fees and
expenses) in connection with the negotiation, preparation, execution
and
delivery of this Amendment and all other matters herein provided
for or
required in connection with this
Amendment.
|
3. Representations
and Warranties.
Borrower hereby represents and warrants to Lender that:
| (a) |
All
representations and warranties made by the Borrower in the Agreement
are
true and correct in all material respects as if they had been made
on the
date hereof;
|
| (b) |
No
Default or Event of Default exists within the meaning of the
Agreement;
|
4
| (c) |
The
officer of Borrower executing this Amendment shall be fully authorized
to
do so, and all corporate actions necessary or proper to authorize
the
execution of this Amendment have been duly done, taken and performed.
No
consent, authorization or approval of any other Person is necessary
for
the due execution and delivery by Borrower of this Amendment and
the
performance by Borrower of the terms hereof and thereof. This Amendment
is
executed and delivered in accordance with any laws and regulations
applicable hereto and thereto, and is the legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms;
and
|
| (d) |
The
execution, delivery, and performance, in accordance with its terms,
of
this Amendment will not violate any provision of Borrower’s organizational
documents, any law, or any applicable judgment or regulation of any
court
or of any public or governmental agency, officer, or authority, and
will
not conflict with, result in a breach of or default under, or result
in
the creation of any lien, charge or encumbrance upon any of the property
or assets of Borrower (except for the security interest created by
the
Agreement and related loan documents) under any indenture, mortgage,
contract, deed of trust, or other agreement to which Borrower is
a party
or by which Borrower or any of its properties or assets is or may
be
bound.
|
4. Entire
Agreement.
This
Amendment and the Agreement embody the entire agreement between the parties
respecting the subject matter hereof and supersede all prior agreements,
proposals, communications and understandings relating to such subject matter.
The terms of the Amendment shall be considered a part of the Agreement as if
fully set forth therein.
5. Miscellaneous.
This
Amendment shall be binding upon the Borrower and its successors and assigns
and
the Lender and its successors and assigns. The section headings herein are
furnished for the convenience of the parties and are not to be considered in
the
construction or interpretation of this Amendment or the Agreement. This
Amendment may be executed in any number of counterparts, each of which shall
be
deemed an original, but which together shall constitute one and the same
instrument. Capitalized terms not defined herein shall have the meanings set
forth in the Agreement. This Agreement shall be a contract made under and
governed by the laws of the State of Illinois applicable to contracts made
and
to be performed entirely within such State.
6. No
Other Amendments.
In case
of a conflict between the terms of this Amendment and the Agreement, the terms
of this Amendment control. Except as expressly set forth in this Amendment,
the
terms of the Agreement remain unchanged and in full force and
effect.
[SIGNATURE
PAGE FOLLOWS]
5
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year
first above written.
|
ALLIED
HEALTHCARE PRODUCTS, INC.
|
|
|
By: /s/
Xxxxxx X. Xxxx
|
|
|
Name: Xxxxxx
X. Xxxx
|
|
|
Title: Vice
President of Finance
|
|
|
LASALLE
BANK NATIONAL ASSOCIATION
|
|
|
By: /s/
Xxxxx X. Xxxxxxx
|
|
|
Name: Xxxxx
X. Xxxxxxx
|
|
|
Title: Vice
President
|
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