Exhibit 10.1

 
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
 
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Agreement"), dated
as of November 7, 2003, is between and among ATRION CORPORATION, a Delaware
corporation ("Atrion"), ATRION MEDICAL PRODUCTS, INC., an Alabama corporation
("AMI"), HALKEY-ROBERTS CORPORATION, a Florida corporation ("Halkey-Roberts"),
QUEST MEDICAL, INC., a Texas corporation ("Quest"), ALATENN PIPELINE COMPANY,
LLC, an Alabama limited liability company (successor by conversion to AlaTenn
Pipeline Company, Inc. an Alabama corporation) ("AlaTenn"), ATRION LEASING
COMPANY, LLC, an Alabama limited liability company (successor by conversion to
Atrion Leasing Company, Inc. an Alabama corporation) ("ALI"), and ATRION
INTERNATIONAL, INC., a U.S. Virgin Islands corporation ("AII") (individually, a
"Borrower," and collectively, the "Borrowers") and SOUTHTRUST BANK, an Alabama
banking corporation (successor by conversion to SouthTrust Bank, National
Association, a national banking association)(the "Lender").
 
RECITALS:
 
Borrowers and Lender are parties to that certain Loan and Security Agreement
dated November 12, 1999, as amended by Amendment to Loan and Security Agreement
dated as of December 26, 2001 (as amended, the "Loan Agreement"), pursuant to
which the Lender established a Credit Facility for the Borrowers' benefit in the
maximum principal amount of Twenty-Five Million Dollars ($25,000,000). All
defined terms used in this Agreement without definition shall have the meanings
ascribed to them in the Loan Agreement. In order to further evidence the Credit
Facility, the Borrowers executed and delivered to Lender the 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,
and by Second Amendment to Line of Credit Promissory Note dated December 26,
2001 (which such Second Amendment, another other things, increased the principal
balance of the Line of Credit Note to $25,000,000) (the "Line of Credit Note"),
evidencing the Line of Credit Loan portion of the Credit Facility. To date, no
Term Loans or Letters of Credit exist under the Credit Facility.
 
Borrowers have requested that the Termination Date be extended from November 12,
2004 until November 12, 2006, and that Lender agree to certain amendments to the
Pricing Matrix attached as "Exhibit A" to the Loan Agreement. Lender has agreed
to such changes.
 
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
 
1.           Termination Date. Pursuant to that certain Third Amendment to Line
of Credit Promissory Note dated of even date herewith, the Termination Date has
been extended from November 12, 2004 until November 12, 2006. Accordingly, the
definition "Termination Date" as the same appears in Section 1.1 of the Loan
Agreement is modified and amended by deleting the date of November 12, 2004 and
inserting in lieu thereof November 12, 2006.
 
2.           Pricing Matrix. The Pricing Matrix attached as Exhibit A is hereby
deleted in its entirety, and the Revised Exhibit A which is attached hereto is
inserted in lieu thereof.
 
 
 

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3.           Line of Credit Note. Contemporaneously herewith, Borrowers and
Lender have entered into the Third Amendment to Line of Credit Note. All
references in the Loan Agreement to the Line of Credit Note shall refer to the
Note, as so amended.
 
4.           Confirmation of Obligations. Except as herein modified, the Loan
Agreement shall remain in full force and effect, and the Loan Agreement is
hereby ratified and affirmed in all respects.
 
5.           No Novation and No Release of Collateral. The execution and
delivery of this Agreement shall not be interpreted or construed as, and in fact
does not constitute, a novation, payment, or satisfaction of all or any portion
of the Loan Agreement; rather, this Agreement is strictly amendatory in nature.
The execution, delivery, and performance of this Agreement shall not operate to
release any Collateral securing the Credit Facility nor modify or otherwise
affect the lien and security interest held by Lender in and to such Collateral.
 
6.           Counterparts. This Agreement may be executed in multiple
counterparts and using multiple signature pages and shall be binding and
enforceable at such time as each party has executed a counterpart of this
Agreement. The signature of 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.
 
7.           Interpretation. No provision of this Agreement shall be construed
against or interpreted to the disadvantage of any party to this Agreement by any
court or other governmental or judicial authority by reason of such party's
having or being deemed to have structured or dictated such provision.
 
8.           Integration. Borrowers acknowledge and agree that no promises,
agreements, understandings, or commitments of any nature whatsoever have been
made by or on behalf of Lender in respect to the Credit Facility and the Loan
Agreement, except as set forth herein. Specifically, Borrowers acknowledge and
agree that Lender has made no agreement, and is in no way obligated, to grant
any extension, indulgence, forbearance, or consent with respect to the Credit
Facility or any matter relating to the Credit Facility, except as specifically
set forth herein.
 
9.           Severability. If any provisions of this Agreement 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 provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
 
10.         Controlling Law. THE VALIDITY, INTERPRETATION, ENFORCEMENT AND
EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF ALABAMA. THE LENDER'S PRINCIPAL PLACE OF BUSINESS IS
LOCATED IN JEFFERSON COUNTY IN THE STATE OF ALABAMA, AND THE BORROWERS AGREE
THAT THE CREDIT FACILITY SHALL BE FUNDED FROM AND THIS AGREEMENT SHALL BE HELD
BY LENDER AT SUCH PRINCIPAL PLACE OF BUSINESS, AND THE HOLDING OF THIS AGREEMENT
BY LENDER THEREAT SHALL CONSTITUTE SUFFICIENT MINIMUM CONTACTS OF BORROWERS WITH
JEFFERSON COUNTY AND THE STATE OF ALABAMA FOR THE PURPOSE OF CONFERRING
JURISDICTION UPON THE FEDERAL AND STATE COURTS PRESIDING IN SUCH COUNTY AND
STATE.
 
 
 

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11. Waiver of Jury Trial. BORROWERS HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY ON
ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT
OF OR IN ANY WAY PERTAINING OR RELATED TO LOAN OBLIGATION, THIS AGREEMENT, OR
ANY OTHER LOAN DOCUMENT, OR IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED
TO OR INCIDENTAL TO ANY DEALINGS OF LENDER AND BORROWERS WITH RESPECT TO THE
LOAN OBLIGATIONS, THIS AGREEMENT, AND ANY OTHER LOAN DOCUMENT, OR IN CONNECTION
WITH THE TRANSACTIONS RELATED HERETO OR CONTEMPLATED HEREBY OR THE EXERCISE OF
ANY PARTY'S RIGHTS AND REMEDIES WITH RESPECT TO THE LOAN OBLIGATIONS, THIS
AGREEMENT, OR OTHERWISE, OR THE CONDUCT OF THE RELATIONSHIP OF THE PARTIES
HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. BORROWERS ACKNOWLEDGE THAT
LENDER MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE KNOWING, VOLUNTARY, AND BARGAINED AGREEMENT OF THE BORROWERS IRREVOCABLY TO
WAIVE THEIR RIGHTS TO TRIAL BY JURY, AND THAT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN BORROWERS AND
LENDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
 
IN WITNESS WHEREOF, Borrowers and Lender have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
 
 
 
BORROWERS:
   
 
ATRION CORPORATION,   
a Delaware corporation
     
By:  /s/ Jeffery Strickland
 
Jeffery Strickland
 
Its Vice President
         
ATRION MEDICAL PRODUCTS, INC.,
 
an Alabama corporation
     
By:  /s/ Jeffery Strickland
 
Jeffery Strickland
 
Its Vice President

 
 

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HALKEY-ROBERTS CORPORATION,
a Florida corporation
         
By:  /s/ Jeffery Strickland
 
Jeffery Strickland
 
Its Vice President
   

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

 

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

 
 

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

 
 

 
ATRION  INTERNATIONAL, INC.,
a U.S. Virgin Islands corporation
     
By:  /s/ Jeffery Strickland
 
Jeffery Strickland
 
Its Secretary

 
 
 

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LENDER:
     
SOUTHTRUST BANK,
 
an Alabama banking corporation
         
By: /s/ Robert Engram
 
Robert Engram
 
Its Vice President

 
 

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REVISED EXHIBIT A
 
PRICING MATRIX
(Effective 11/07/03)
       
If the ratio of Consolidated
The Line of Credit
The Unused Line
The Term Loan
Total Liabilities/Consolidated
Loan Margin
Fee Will Be:
Margin Will Be:
Tangible Net Worth is:
Will Be:
   
Greater than 2.00
200 bps (2.00%)
50 bps (.50%)
225 bps (2.25%)
1.51 to 2.00
150 bps (1.50%)
50 bps (.50%)
175 bps (1.75%)
1.15 to 1.50
125 bps (1.25%)
25 bps (.25%)
150 bps (1.50%)
Less than 1.15
100 bps (1.00%)
12.5 bps (.125%)
125 bps (1.25%)

 
*NOTE: The changes reflected in the above-Pricing Matrix also apply to the
Pricing Matrix attached as Exhibit A to the Line of the Credit Note which is
attached as Exhibit B to the Loan Agreement, and to the Pricing Matrix attached
as Exhibit A to the Term Note which is attached as Exhibit D to the Loan
Agreement.