$6,000,000.00
AMENDMENT NO. 4 AND CONSENT
TO
LOAN AND SECURITY AGREEMENT
originally dated as of April 21, 1999
by and among
ALLION HEALTHCARE, INC.
F/K/A THE CARE GROUP, INC.
MAIL ORDER MEDS, INC.
MAIL ORDER MEDS OF NEW YORK, INC.
F/K/A CARE LINE OF NEW YORK, INC.
("BORROWER")
and
XXXXXX HEALTHCARE FINANCE, INC.
F/K/A HCFP FUNDING, INC.
("LENDER")
Amended as of September __, 2003
AMENDMENT NO. 4 AND CONSENT TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 4 AND CONSENT TO LOAN AND SECURITY AGREEMENT (this
"AMENDMENT") is made as of this ___ day of September, 2003, by and among ALLION
---------
HEALTHCARE, INC. F/K/A THE CARE GROUP, INC., a Delaware corporation ("ALLION"),
------
MAIL ORDER MEDS, INC., a Texas corporation ("MEDS") and MAIL ORDER MEDS OF NEW
----
YORK, INC. F/K/A CARE LINE OF NEW YORK, INC., a New York corporation, ("MOMS"
----
and, collectively with Allion and Meds, "BORROWER"), and XXXXXX HEALTHCARE
--------
FINANCE, INC. F/K/A HCFP FUNDING, INC., a Delaware corporation ("LENDER").
------
RECITALS
WHEREAS, pursuant to that certain Loan and Security Agreement dated
April 21, 1999 by and between Borrower and Lender (as previously amended, as
amended hereby and as further amended, modified and restated from time to time,
the "LOAN AGREEMENT"), Lender agreed to make available to Borrower a revolving
credit loan (the "LOAN");
WHEREAS, Borrower has informed Lender that Allion has entered into a
Prime Vendor Agreement, dated as of July 15, 2003 (the "PRIME VENDOR
AGREEMENT"), with AmerisourceBergen Drug Corporation ("DISTRIBUTOR"), pursuant
to which Distributor will provide pharmaceutical and other products and services
to Allion (the transactions contemplated thereby, collectively, the "PROPOSED
TRANSACTION"); and
WHEREAS, in connection with the Proposed Transaction, Borrower has
requested that Lender provide its written consent to the Proposed Transaction
and make certain other modifications to the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing, the terms and
conditions set forth in this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender and Borrower hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined in this Amendment, all
capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Loan Agreement.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT. As of the Effective Date, the
Loan Agreement shall be modified as follows:
(a) Section 1.36(k) of the Loan Agreement is hereby amended in its
entirety to read as follows:
"; (k) with respect to the Subordinated Obligations owing to
AmerisourceBergen Drug Corporation, liens in existence on the
date such Subordinated Obligations are incurred securing
indebtedness evidenced by such Subordinated Obligations,
provided that (i) such liens are subordinate to the liens and
encumbrances in favor of Lender, (ii) the principal amount of
the indebtedness so secured is not increased and (iii) such
liens do not attach to any other property."
2
(b) Sections 1.47(b) and 1.47(c) of the Loan Agreement are hereby
amended in their respective entireties to read as follows:
"SECTION 1.47(B). SUBORDINATED OBLIGATIONS.
`Subordinated Obligations' means, collectively, (i) those
certain Subordinated Secured Promissory Notes due May 1, 2004
issued by Allion on May 1, 2003 to Xxxxx X. Xxxxxxxx and Xxxxx
X. Xxxxxxxx, in an aggregate original principal amount of
$1,150,000, (ii) those certain Subordinated Secured Promissory
Notes due May 1, 2005 issued by Allion on May 1, 2003 to Xxxxx
X. Xxxxxxxx and Xxxxx X. Xxxxxxxx, in an aggregate principal
amount of $1,250,000, (iii) that certain Indemnity Agreement
between Borrower and Xxxx Xxxxxxxxx dated as of November __,
2000 and (iv) the obligations of Allion to AmerisourceBergen
Drug Corporation ("AmerisourceBergen") under the Prime Vendor
Agreement dated as of July 15, 2003 by and between
AmerisourceBergen and Allion.
SECTION 1.47(C). SUBORDINATION AGREEMENT.
`Subordination Agreements' means, collectively, (i) that
certain Subordination Agreement, dated as of January 31, 2003,
by and among Borrower, Lender and Xxxx Xxxxxxxxx, (ii) that
certain Subordination Agreement, dated as of May 1, 2003, by
and among Borrower, Lender, Xxxxx X. Xxxxxxxx and Xxxxx X.
Xxxxxxxx and (iii) that certain Subordination Agreement, dated
as of September __, 2003, by and among Allion, Lender and
AmerisourceBergen Drug Corporation."
(c) Section 3.1(f) of the Loan Agreement is hereby amended by
inserting, immediately after the word "Borrower's" appearing therein, the words
"goods, returned goods and".
SECTION 3. CONSENT. In reliance on the information previously provided
by Borrower to Lender regarding the Proposed Transaction, including but not
limited to the fully executed Prime Vendor Agreement (together with any and all
exhibits and schedules thereto), Lender hereby consents to the Proposed
Transaction on the terms and conditions set forth in the Prime Vendor Agreement
as in effect on the date hereof.
SECTION 4. CONFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
Borrower hereby (a) confirms that all of the representations and warranties set
forth in Article IV of the Loan Agreement are true and correct with respect to
such entity (except to the extent such representation or warranty relates to a
particular date, in which case, such confirmation relates to such date), and (b)
specifically represents and warrants to Lender that it has good and marketable
title to all of its Collateral, free and clear of any lien or security interest
in favor of any other person or entity.
3
SECTION 5. FEES; EXPENSES.
(a) In consideration of Lender's agreement to enter into this
Amendment, Borrower unconditionally agrees to pay to Lender an amendment fee
(the "Fee") equal to Fifteen Thousand and No/100 Dollars ($15,000.00), which Fee
shall (a) be due and payable by Borrower on the date of the execution and
delivery of this Amendment by Borrower, and (b) constitute a portion of the
Obligations evidenced by the Note and secured by the Loan Agreement and other
Loan Documents. Lender shall be entitled to deduct, and Borrower by its
signature below hereby authorizes Lender to deduct, the full amount of the Fee
from the proceeds of the next subsequent Revolving Credit Loan made by Lender
under the Loan Agreement (as amended hereby).
(b) Notwithstanding anything in this Amendment to the
contrary, in addition to the Fee, Borrower shall be responsible for payment of
legal fees for the services of Lender's in-house counsel in connection with the
preparation of this Amendment. Lender shall be entitled to deduct, and Borrower
by its signature below hereby authorizes Lender to deduct, the full amount of
the fees set forth in this Section 5(b) from the proceeds of the next subsequent
Revolving Credit Loan made by Lender under the Loan Agreement (as amended
hereby).
SECTION 6. ENFORCEABILITY. This Amendment constitutes the legal, valid
and binding obligation of each Borrower and Lender, and is enforceable against
each Borrower and Lender in accordance with its terms.
SECTION 7. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date that all of the following conditions are satisfied in
Lender's sole discretion (such date, the "EFFECTIVE DATE"):
(a) Lender shall have received two (2) originals of this
Amendment duly executed by an authorized officer of each entity comprising
Borrower;
(b) Lender shall have received fully executed copies of the
Prime Vendor Agreement and all other agreements and instruments executed in
connection therewith;
(c) Lender shall have received the Subordination Agreement
executed in connection with the Prime Vendor Agreement, duly executed by an
authorized officer of Allion and Distrbutor;
(d) there shall have occurred and be continuing no Event of
Default and no event which, with the giving of notice or the lapse of time or
both, could constitute such an Event of Default and, after giving effect to this
Amendment, there shall have occurred no Event of Default and no Event which,
with the giving of notice or lapse of time or both, could constitute an Event of
Default; and
(e) the representations and warranties set forth in Section 5
of this Amendment and in Article IV of the Loan Agreement shall be true and
correct as of the date hereof and after giving effect to this Amendment (unless
any such representation or warranty by its terms is intended to refer
specifically to any earlier date, in which case such representation or warranty
shall have been true and correct as of such date).
4
SECTION 8. REFERENCE TO THE EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of similar import shall mean and be a reference to the Loan Agreement as
amended by this Amendment.
(b) Except as specifically amended above, the Loan Agreement,
and all other Loan Documents, shall remain in full force and effect, and are
hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided in this Amendment, operate as
a waiver of any right, power or remedy of Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents, instruments and
agreements executed or delivered in connection with the Loan Agreement.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Maryland without regard to
any otherwise applicable conflicts of law principles.
SECTION 10. HEADINGS. Section headings in this Amendment are included
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 11. COUNTERPARTS. This Amendment may be executed in
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
[SIGNATURES ON NEXT PAGE]
5
IN WITNESS WHEREOF, the parties have caused this Amendment No. 4 and
Consent to Loan and Security Agreement to be executed as of the date first
written above.
LENDER:
XXXXXX HEALTHCARE FINANCE, INC.,
a Delaware corporation
By: /s/ X. XXXXX XXXXXXXX
-------------------------------
Name: X. Xxxxx Whiteley
Title: Vice President
BORROWERS:
ALLION HEALTHCARE, INC.,
a Delaware corporation
By: /S/ XXXXXXX X. XXXXX
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
MAIL ORDER MEDS, INC.,
a Texas corporation
By: /S/ XXXXXXX X. XXXXX
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
MAIL ORDER MEDS OF NEW YORK, INC.,
a New York corporation
By: /S/ XXXXXXX X. XXXXX
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
6
