SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit
10.10
SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Second
Amendment") is entered into as of September 9, 2005 by and among
GREENFIELD
COMMERCIAL CREDIT, L.L.C., a
Michigan limited liability company ("Lender"),
AHPC
HOLDINGS, INC., a
Maryland corporation, and AMERICAN
HEALTH PRODUCTS CORPORATION, a
Texas
corporation (collectively "Borrower").
RECITALS
A. Lender
and Borrower entered into a Loan And Security Agreement dated as of
September 9, 2004 and amended the same effective January, 2005 (together,
the "Loan Agreement"). All capitalized terms not defined herein shall have
the
same meanings ascribed to such terms in the Loan Agreement.
B. Lender
and Borrower desire to extend the Maturity Date of the Loan Agreement and
provide other amendments thereto.
NOW,
THEREFORE, in
consideration of the mutual covenants, conditions, and provisions as hereinafter
set forth, the parties hereto agree to amend the Loan Agreement as
follows:
1. Maturity
Date/Option for further extension. The
Maturity Date is hereby extended to the earlier of demand or September 9,
2006. At Borrower's option, the Maturity Date may be further extended to the
earlier of demand or September 9, 2007 upon written notice to Lender
no
later than July 9, 2006 and payment of a $50,000.00 renewal
fee.
2. Maximum
Loan Amount/Interest Rate. The
Loan
Agreement, Term Sheet thereto and the Revolving Credit Loan Rider #1 ("Rider")
are amended to provide a Maximum Loan Amount of $5,000,000.00. The Effective
Rate is reduced to Prime Rate plus 4.5% and the Default Rate is reduced to
Prime
Rate plus 8.5%.
3. Advance
Formula. The
Loan
Agreement and Rider are amended to provide a Percentage Advance Rate of 80%
of
Eligible Receivables and 50% of non-obsolete finished goods inventory plus
35%
of in-transit inventory with a sub limit of $500,000.00, and an overall
inventory cap of $2,500,000.00.
4. Termination/Prepayment. The
Termination/Prepayment provision of Paragraph 2 (C) is amended
to
provide for a prepayment penalty of 2% of the Maximum Loan Amount, as herein
amended, if prepayment occurs prior to the Maturity Date. There will be no
prepayment penalty if Borrower exercises the option provided for in
paragraph 1 herein.
5. Amendment/Legal/Insurance
Fees. Borrower
shall pay herewith a) an Amendment Fee of $100,000.00 plus Lender's
attorney fees in the amount of $675.00 and b) the premium increase from
Lender's personal property security insurer, as billed.
6. Counterparts. This
Amendment may be executed in counterparts.
IN
WITNESS WHEREOF, the
parties hereto have caused this Second Amendment to be executed and delivered
as
of the date first hereinabove set forth.
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GREENFIELD
COMMERCIAL CREDIT, LLC,
a
Michigan limited liability company
By: GCC
Management, Inc.
Its: Manager
By:_________________________________
Xxxxxx
X. Xxxxx
Its: Vice
President
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a
Maryland corporation
By:_______________________________________
Xxxx
Xxxxxx
Its: President
and
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AMERICAN
HEALTH PRODUCTS CORPORATION
a
Texas corporation
By:________________________________________
Xxxx
Xxxxxx
Its: President
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ACKNOWLEDGEMENT
OF VALIDITY GUARANTOR
Xxxx
X.
Xxxxxx, Validity Guarantor under Validity Guaranty agreement dated as of
September 9, 2004, acknowledges the above Amendment and agrees that
his
Validity Guaranty shall continue in full force and effect.
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WITNESS:
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VALIDITY
GUARANTOR:
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__________________________________________
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____________________________________
Xxxx
X. Xxxxxx
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