Unassociated Document


    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 1720 Sublette Avenue, St.
      Louis, Missouri 63110 (the “Borrower”),
      and
      LASALLE BANK NATIONAL ASSOCIATION, with an office at 135 South LaSalle, Suite
      1140, Chicago, Illinois 60603 (“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]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Amendment as of the day and
      year
      first above written.

    
      
        	 	 
	 	 
	 	
                ALLIED
                  HEALTHCARE PRODUCTS, INC.

              
	 	 
	 	 
	 	
                By: /s/
                  Daniel C. Dunn     

              
	 	
                Name:  Daniel
                  C. Dunn    

              
	 	
                Title: Vice
                  President of Finance   

              
	 	 
	 	
                LASALLE
                  BANK NATIONAL ASSOCIATION

              
	 	 
	 	 
	 	
                By: /s/
                  Brady D. Portaro    

              
	 	
                Name: Brady
                  D. Portaro    

              
	 	
                Title: Vice
                  President    

              


      

      
        
          
          

        

        
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