Exhibit 10.7
 
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
 
THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT is made and entered into as
of the _30th___ day of September, 2008, by and among ATRION CORPORATION, a
Delaware corporation, ATRION MEDICAL PRODUCTS, INC,. an Alabama corporation,
HALKEY-ROBERTS CORPORATION, a Florida corporation, QUEST MEDICAL, INC.,  a Texas
corporation, ALATENN PIPELINE COMPANY, LLC, an Alabama  limited liability
company, and ATRION LEASING COMPANY, LLC, an Alabama limited liability company
(each a “Borrower” and collectively, the “Borrowers”) WACHOVIA BANK NATIONAL
ASSOCIATION, a national banking association organized and existing under the
laws of the United States (the  "Lender")
 
Recitals of Fact
 
Lender has heretofore established a Credit Facility for the Borrower’ benefit in
the maximum principal sum of Twenty-Five Million Dollars ($25,000,000), which is
evidenced and secured by the following:
 
 
·
Loan and Security Agreement dated November 12, 1999, as amended by Amendment to
Loan and Security Agreement dated as of December 26, 2001, by Second Amendment
to Loan and Security Agreement dated November 7, 2003, by Third Amendment to
Loan and Security Agreement dated September 1, 2005, and by Fourth Amendment to
Loan and Security Agreement dated as of July 1, 2008 (as amended, the “Loan
Agreement”), and

 
 
·
Line of Credit Promissory Note dated November 12, 1999 in the original stated
principal amount of $18,500,000 as amended by Note Extension Agreement dated
August 31, 2001, by Second Amendment to Line of Credit Promissory Note dated
December 26, 2001 (which such Second Amendment, among other things increased the
principal balance of the Line of Credit Note to $25,000,000), by Third Amendment
to Line of Credit Promissory Note dated November 7, 2003, by Fourth Amendment to
Line of Credit Promissory Note dated September 1, 2005 and By Fifth Amendment to
Line of Credit Promissory Note dated as of July 1, 2008 (as amended, the “Line
of Credit Note”), evidencing the Line of Credit Loan portion of the Credit
Facility.

 
One or more of the Borrowers maintain lockboxes, lockbox accounts and/or deposit
accounts with the Lender and Borrowers and Lender wish to amend certain
provisions of the Loan Agreement as hereinafter provided.
 
NOW, THEREFORE, for and in consideration of the premises, as set forth in the
Recitals of Fact, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, it is agreed by the parties as
follows:
 
 
 

--------------------------------------------------------------------------------

 
 
Agreements
 

 
Section 1.1 of the Loan Agreement is hereby modified by adding the following
term:
 
"Deposit Accounts” means any and all demand, time, savings, passbook, lockbox or
other deposit account maintained by any Borrower with the Lender.
 
Section 7.8 of the Loan Agreement is hereby deleted in its entirety and in lieu
thereof the following is inserted:
 
7.8. Right of Set-Off.  (a)  Lender’s Rights. In addition to and without
limitation of, any rights of the Lender under applicable law, if any Borrower
become insolvent, however evidenced, or any Event of Default occurs, any and all
deposits (including all account balances, whether provisional or final and
whether or not collected or available) and any other indebtedness at any time
held or owing by Lender to or for the credit or account of the Borrowers may be
off-set and applied toward the payment of the Loan Obligations owing to Lender.
 
(b)  Borrowers’ Rights.  In addition to and without limitation of, any rights of
any Borrower under applicable law, if  (i) Lender becomes insolvent, (ii) the
Federal Deposit Insurance Corporation (“FDIC”) initiates receivership of the
Lender, or (iii) any Borrower is unable to withdraw its funds from any Deposit
Account and no Event of Default has occurred and is continuing, and if at such
time there are any Loan Obligations owing to the Lender, then any and all such
amounts in the Deposit Accounts and any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available, and whether or not covered by FDIC insurance) and any other
indebtedness at any time held or owing by Lender to  or for the credit or
account of the Borrowers or any of them, shall be offset and applied toward the
payment of the Loan Obligations to the extent thereof, subject to applicable
banking laws and regulations.
 
All terms and provisions of the Loan Agreement which are inconsistent with the
provisions of this Amendment are hereby modified and amended to conform hereto;
and, as so modified and amended; the Loan Agreement is hereby ratified, approved
and confirmed.  Except as otherwise may be expressly provided herein, this
Amendment shall become effective as of the date set forth in the initial
paragraph hereof.
 
All references in all Loan Documents to the Loan Agreement shall, except as the
context may otherwise require, be deemed to constitute references to the Loan
Agreement as amended hereby.
 
 
 

--------------------------------------------------------------------------------

 
 
If any provisions of this Amendment or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the remainder of
this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
 
This Agreement may be executed in multiple counterparts and using multiple
signature pages and shall be binding and enforceable at such time each party has
executed a counterpart of this Agreement.  The signature to any party to a
counterpart of this Agreement shall bind such party to the same extent as if all
parties executed a single original hereof.
 
IN WITNESS WHEREOF, Borrowers and Lender have caused this Amendment to be
executed by their respective officers, duly authorized so to do, all on this the
day and year first above written.
 
 
BORROWERS:
   
 
ATRION CORPORATION,   
a Delaware corporation
     
By:  /s/ Jeffery Strickland
 
Title: Vice President & CFO
         
ATRION MEDICAL PRODUCTS, INC.,
 
an Alabama corporation
     
By:  /s/ Jeffery Strickland
 
Title: Vice President

 
 

 
HALKEY-ROBERTS CORPORATION,
an Florida corporation
         
By:  /s/ Jeffery Strickland
 
Title: Vice President
   

 
QUEST MEDICAL, INC.,
a Texas corporation
         
By: /s/ Jeffery Strickland
 
Title: Vice President

 
 
 

--------------------------------------------------------------------------------

 
 
 

 
ALATENN PIPELINE COMPANY, LLC,
an Alabama limited liability company
         
By:  /s/ Jeffery Strickland
 
Title: Vice President

 
 

 
ATRION LEASING COMPANY, LLC,
an Alabama limited liability company
         
By:  /s/ Jeffery Strickland
 
Title: Vice President

 

 
LENDER:
     
WACHOVIA BANK, NATIONAL ASSOCIATION,
a national banking association
         
By:   /s/Gideon Oosthuizen
 
Title:_SVP