Document:

EXHIBIT 10.3

WAIVER
AND FOURTH AMENDMENT TO CREDIT AGREEMENT

          This WAIVER AND
FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), made
and entered into as of February 13, 2013, is by and between Electromed, Inc., a
Minnesota corporation (the “Borrower”), and U.S. Bank National
Association, a national banking association (the “Bank”).

RECITALS

          A.     The
Bank and the Borrower entered into that certain Amended and Restated Credit
Agreement dated as of November 7, 2011, between the Bank and the Borrower, as
amended by that certain First Amendment to Credit Agreement dated as of
December 30, 2011, that certain Consent and Waiver and Second Amendment to
Credit Agreement dated as of May 14, 2012, and that certain Waiver and Third
Amendment to Credit Agreement dated as of September 28, 2012 (as further
amended, restated or otherwise modified from time to time, the “Credit
Agreement”).

          B.     Section
6.15 of the Credit Agreement forbids the Borrower from permitting the Fixed
Charge Coverage Ratio as of the last day of any fiscal quarter for the four
consecutive fiscal quarters ending on that date to be less than 1.2 to 1.0. The
Borrower has informed the Bank that the Fixed Charge Coverage Ratio for the
fiscal quarter ending December 31, 2012, is less than 1.2 to 1.0, which
constitutes an Event of Default under Section 7.1(c) of the Credit Agreement
(the “FCCR Event of Default”).

          C.     Section
6.16 of the Credit Agreement forbids the Borrower from permitting the Total
Cash Flow Leverage Ratio as of the last day of any fiscal quarter for the four
consecutive fiscal quarters ending on that date to be more than 3.5 to 1.0. The
Borrower has informed the Bank that the Total Cash Flow Leverage Ratio for the
fiscal quarter ending December 31, 2012, is more than 3.5 to 1.0, which
constitutes an Event of Default under Section 7.1(c) of the Credit Agreement
(the “TCFL Event of Default”).

          D.     Section
6.20 of the Credit Agreement provides that in no event shall James J. Cassidy
cease to be chief executive officer. The Borrower has informed the Bank that
James J. Cassidy is no longer chief executive officer of the Borrower, which
constitutes an Event of Default under Section 7.1(c) of the Credit Agreement
(the “CEO Event of Default” and together with the FCCR Event of Default
and the TCFL Event of Default, the “Existing Defaults”).

AGREEMENT

          NOW,
THEREFORE, for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:

          Section
1.     Capitalized Terms.
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement, unless the context otherwise
requires.

          Section
2.     Waiver.

	
  

 	
  

 
	
  

 	
           2.1.   Waiver.
 Upon the effectiveness of this Amendment pursuant to Section 4 hereof, the
 Bank hereby waives the Existing Defaults.

 
	
  

 	
  

 
	
  

 	
           2.2.   Scope
 of Waiver. The waiver set forth in Section 2.1 hereof
 is limited to the express terms thereof, and nothing herein shall be deemed a
 consent or waiver by the Bank with respect to any other term, condition,
 representation, or covenant applicable to the Borrower under the Credit
 Agreement or any of the other agreements, documents, or instruments executed
 and delivered in connection therewith, or of the covenants described therein.
 The waiver set forth herein shall not be deemed to be a course of action upon
 which the Borrower or its Subsidiaries may rely in the future.

 
	
  

 	
  

 
	
  

 	
 Section
 3.     Amendments to Credit Agreement .
 

 
	
  

 	
  

 
	
  

 	
           3.1.     Definitions.
 The definitions of “Applicable Margin” and “Revolving Commitment Amount” set
 forth in Section 1.1 of the Credit Agreement are amended and restated to read
 in their entireties as follows:

 
	
  

 	
  

 
	
  

 	
           “Applicable
 Margin”: 3.50%.

 
	
  

 	
  

 
	
  

 	
           “Fixed
 Charge Coverage Ratio”: For the fiscal quarter ending on the date of
 determination, the ratio of

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (a)
 EBITDA, plus operating lease expense, minus the sum of (i) any Restricted
 Payments, (ii) 50% of depreciation, and (iii) Cash Taxes,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           to

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (b)
 the sum of cash interest payments and all required principal payments with
 respect to Total Liabilities (including but not limited to all payments with
 respect to Capitalized Lease Obligations of the Borrower), plus operating
 lease expense, 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 in each case determined for said period in
 accordance with GAAP.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “Revolving Commitment Amount”: $2,500,000.

 
	
  

 	
  

 	
  

 
	
  

 	
           3.2.     Financial
 Reporting. Section 5.1(b) of the Credit Agreement is
 amended to read in its entirety as follows:

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (b)     As
 soon as available and in any event within 30 days after the end of each
 calendar month, (i) unaudited statements of income, cash flow and changes in
 stockholders’ equity for the Borrower for such month and for the period from
 the beginning of such fiscal year to the end of such month, and a balance
 sheet of the Borrower as at the end of such month, setting forth in comparative
 form figures for the corresponding period for the preceding fiscal year,
 accompanied by a certificate signed by the chief financial officer of the
 Borrower stating that such financial statements present fairly the financial
 condition of the Borrower and that the same have been prepared in accordance
 with GAAP (except for the absence of footnotes and subject to year end audit
 adjustments as to the interim statements); (ii) a summary of referrals in
 form and substance satisfactory to the Bank; and (iii) a summary of product
 shipments in form and substance satisfactory to the Bank.

 

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           3.3.     Permitted
 Indebtedness. Section 6.12(d) of the Credit Agreement
 is amended to read in its entirety as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (d) Intentionally Omitted.

 

	
  

 	
  

 	
  

 
	
  

 	
           3.4.     Fixed
 Charge Coverage Ratio. Section 6.15 of the Credit
 Agreement is amended to read in its entirety as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           Section
 6.15   Fixed Charge Coverage Ratio. The Borrower will not
 permit the Fixed Charge Coverage Ratio, as of the quarter ending September
 30, 2013, to be less than 1.15 to 1, for the quarter ending on such date.

 
	
  

 	
  

 	
  

 
	
  

 	
           3.5.     Minimum
 EBITDA. Section 6.16 of the Credit Agreement is amended
 to read in its entirety as follows:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           Section
 6.16   Minimum EBITDA. The Borrower will not permit EBITDA,
 (i) as of the quarter ending March 31, 2013, to be less than negative
 $275,000, and (ii) as of the quarter ending June 30, 2013, to be less than
 $425,000, in each case for the quarter ending on such date.

 
	
  

 	
  

 	
  

 
	
  

 	
           3.6.     Key
 Man Life Insurance. Section 6.18 of the Credit
 Agreement is amended to read in its entirety as follows:

 
	
  

 	
  

 
	
  

 	
  

 	
           Section
 6.18.   Intentionally Omitted.

 
	
  

 	
  

 	
  

 
	
  

 	
           3.7.     Form
 of Compliance Certificate. Exhibit G to the Credit
 Agreement is amended to read in its entirety as set forth on Exhibit A
 hereto. 

 
	
  

 	
  

 	
  

 
	
           Section
 4.     Effectiveness of Waiver.
 The waiver set forth in Section 2.1 hereof and amendments set forth in
 Section 3 hereof shall become effective upon the delivery of, or compliance
 with, the following:

 
	
  

 	
  

 	
  

 
	
  

 	
           4.1.     This
 Amendment, duly executed by the Borrower and delivered (including by way of
 telecopy or other electronic transmission (including by e-mail in .pdf format),
 in each case with original signatures to follow promptly thereafter) to the
 Bank.

 
	
  

 	
  

 	
  

 
	
  

 	
           4.2.     A
 certificate of an officer of the Borrower certifying to a true and correct
 copy of resolutions of the Borrower authorizing and ratifying this Amendment,
 each in form and substance satisfactory to the Bank.

 
	
  

 	
  

 	
  

 
	
  

 	
           4.3.     The
 Bank shall have received a non-refundable amendment fee in the amount of
 $5,000.

 

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           4.4.     The
 Borrower shall have satisfied such other conditions as specified by the Bank,
 including payment of all unpaid legal fees and expenses incurred by the Bank
 through the date of this Amendment in connection with the Credit Agreement
 and this Amendment and requested to be paid by the Bank.

 
	
  

 	
  

 	
  

 
	
           Section
 5.     Release, No Waiver, Representations,
 Warranties, Authority, No Adverse Claim. 

 
	
  

 	
  

 	
  

 
	
  

 	
           5.1.     Release
 of Claims. The Borrower, for itself and on behalf of
 its legal representatives, successors, and assigns, hereby (a) expressly
 waives, releases, and relinquishes the Bank from any and all claims, offsets,
 defenses, affirmative defenses, and counterclaims of any kind or nature
 whatsoever that the Borrower has asserted, or might assert, against the Bank
 with respect to the Obligations, the Credit Agreement (including as affected
 by this Amendment), and any other Loan Document, in each case arising on or
 before the date hereof, such waiver and release being with full knowledge and
 understanding of the circumstances and effect thereof, and (b) expressly
 covenants and agrees never to institute, cause to be instituted, or continue
 prosecution of any suit or other form of action or proceeding of any kind or
 nature whatsoever against the Bank by reason of or in connection with any of
 the foregoing matters, claims, or causes of action.

 
	
  

 	
  

 	
  

 
	
  

 	
           5.2.     No
 Waiver. The execution of this Amendment and acceptance
 of any documents related hereto shall not be deemed to be a waiver of any
 Default or Event of Default under the Credit Agreement (other than as
 specifically set forth in Section 2 of this Amendment) or breach,
 default, or event of default under any Security Document or other document
 held by the Bank, whether or not known to the Bank and whether or not
 existing on the date of this Amendment.

 
	
  

 	
  

 	
  

 
	
  

 	
           5.3.     Reassertion
 of Representations and Warranties, No Default. The
 Borrower hereby represents that on and as of the date hereof and after giving
 effect to this Amendment (a) all of the representations and warranties
 in the Credit Agreement and the Security Documents are true, correct, and
 complete in all material respects, without duplication as to any materiality
 modifiers, qualifications, or limitations set forth in Article IV of the
 Credit Agreement, in each case as of the date hereof as though made on and as
 of such date, except (i) for changes permitted by the terms of the
 Credit Agreement and (ii) to the extent that any such representations
 and warranties expressly relate to an earlier date, in which case such representations
 and warranties were true and correct in all material respects as of such
 earlier date, and (b) there will exist no Default or Event of Default
 under the Loan Documents as affected by this Amendment on such date that the
 Bank has not expressly waived in writing.

 
	
  

 	
  

 	
  

 
	
  

 	
           5.4.     Authority,
 No Conflict, No Consent Required. The Borrower
 represents and warrants that it has the power, legal right, and authority to
 enter into the Amendment and has duly authorized as appropriate the execution
 and delivery of the Amendment by proper corporate action, and neither the
 Amendment nor the agreements herein contravene or constitute a default under
 any agreement, instrument, or indenture to which the Borrower is a party or a
 signatory, any provision of the Borrower’s articles of incorporation or
 bylaws, or any other agreement or requirement of law, or result in the
 imposition of any Lien on any of its property under any agreement binding on
 or applicable to the Borrower or any of its property except, if any, in favor
 of the Bank. The Borrower represents and warrants that no consent, approval,
 or authorization of or registration or declaration with any Person, including
 but not limited to any governmental authority, is required in connection with
 the execution and delivery of the Amendment or the performance of obligations
 of the Borrower therein described, except for those that the Borrower has
 obtained or provided and as to which the Borrower has delivered certified
 copies of documents evidencing each such action to the Bank.

 

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           5.5.     No
 Adverse Claim. The Borrower warrants, acknowledges, and
 agrees that no events have taken place and no circumstances exist at the date
 hereof that would give the Borrower a basis to assert a defense, offset, or
 counterclaim to any claim of the Bank with respect to the Obligations.

 

          Section
6.     Affirmation of Loan Documents, Further
References, Affirmation of Security Interest. Each of the
Bank and the Borrower acknowledge and affirm that the Credit Agreement, the
Security Documents, and each of the other Loan Documents to which it is a party
is hereby ratified and confirmed in all respects and all terms, conditions, and
provisions of each such Loan Document shall remain unmodified and in full force
and effect. The Borrower confirms to the Bank that the Obligations are and
continue to be secured by the security interest granted in favor of the Bank
under the Security Documents and that all of the terms, conditions, provisions,
agreements, requirements, promises, obligations, duties, covenants, and
representations of the Borrower under such documents and any and all other
documents and agreements entered into with respect to the obligations under the
Credit Agreement are hereby ratified, assumed, and affirmed in all respects by
the Borrower.

          Section
7.     Merger and Integration, Superseding Effect.
This Amendment, on and after the date hereof, embodies the entire agreement and
understanding between the parties hereto and supersedes and has merged into
this Amendment all prior oral and written agreements on the same subjects by
and between the parties hereto with the effect that this Amendment shall
control with respect to the specific subjects hereof and thereof.

          Section
8.     Severability. Whenever
possible, each provision of this Amendment and any other statement, instrument,
or transaction contemplated hereby or relating hereto shall be interpreted so
as to be effective, valid, and enforceable under the applicable law of any
jurisdiction, but if any provision of this Amendment or any other statement,
instrument, or transaction contemplated hereby or relating hereto is held to be
prohibited, invalid, or unenforceable under the applicable law, such provision
shall be ineffective in such jurisdiction only to the extent of such
prohibition, invalidity, or unenforceability, without invalidating or rendering
unenforceable the remainder of such provision or the remaining provisions of
this Amendment or any other statement, instrument, or transaction contemplated
hereby or relating hereto in such jurisdiction, or affecting the effectiveness,
validity, or enforceability of such provision in any other jurisdiction.

          Section
9.     Successors. This
Amendment shall be binding upon the Borrower, the Bank, and their respective
successors and assigns, and shall inure to the benefit of the Borrower, the
Bank, and the successors and assigns of the Bank.

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          Section
10.     Expenses. The
Borrower shall pay the Bank, upon execution of this Amendment, the fees and
expenses as provided in Section 8.2 of the Credit Agreement.

          Section
11.     Headings. The
headings of various sections of this Amendment are for reference only and shall
not be deemed to be a part of this Amendment.

          Section
12.     Counterparts. This
Amendment may be executed in several counterparts as deemed necessary or
convenient, each of which, when so executed, shall be deemed an original,
provided that all such counterparts shall be regarded as one and the same
document.

          Section
13.     Governing Law. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AMENDMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF
LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES
APPLICABLE TO NATIONAL BANKS. 

[The remainder of
this page is intentionally left blank]

6

          IN
WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date and year first above written.

	
  

 	
  

 	
  

 
	
  

 	
 BORROWER:

 
	
  

 	
  

 	
  

 
	
  

 	
 ELECTROMED, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
    /s/ Jeremy T. Brock

 
	
  

 	
 Name: Jeremy T. Brock

 
	
  

 	
 Title:  Chief Financial Officer

 
	
  

 	
  

 	
  

 
	
  

 	
 BANK:

 
	
  

 	
  

 	
  

 
	
  

 	
 U.S. BANK NATIONAL
 ASSOCIATION

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
      /s/ Daniel J. Miller

 
	
  

 	
 Name: Daniel J. Miller

 
	
  

 	
 Title:  Vice President

 

Signature Page to Amendment

EXHIBIT A TO

WAIVER AND FOURTH AMENDMENT TO

CREDIT AGREEMENT

EXHIBIT G TO 

CREDIT AGREEMENT

FORM OF COMPLIANCE
CERTIFICATE

To: U.S. Bank National Association:

THE UNDERSIGNED HEREBY CERTIFIES THAT: 

          (1)     I
am the duly elected chief financial officer of Electromed, Inc. (the
“Borrower”);

          (2)     I
have reviewed the terms of the Amended and Restated Credit Agreement dated as
of November 7, 2011, between the Borrower and U.S. Bank National Association
(as amended, restated, or otherwise modified from time to time, the “Credit
Agreement”), and I have made, or have caused to be made under my supervision, a
detailed review of the transactions and conditions of the Borrower during the
accounting period covered by the Attachment hereto;

          (3)     The
examination described in paragraph (2) did not disclose, and I have no
knowledge, whether arising out of such examinations or otherwise, of the
existence of any condition or event that constitutes a Default or an Event of
Default (as such terms are defined in the Credit Agreement) during or at the
end of the accounting period covered by the Attachment hereto or as of the date
of this Certificate, except as described below (or on a separate attachment to
this Certificate). The exceptions listing, in detail, the nature of the
condition or event, the period during which it has existed, and the action the
Borrower has taken, is taking, or proposes to take with respect to each such
condition or event are as follows:

	
  

 
	
  

 
	
  

 

          The
foregoing certification, together with the computations in the Attachment
hereto and the financial statements delivered with this Certificate in support
hereof, are made and delivered this        day of
                                  ,               pursuant to Section 5.1(c) of the
Credit Agreement.

	
  

 	
  

 	
  

 
	
  

 	
 ELECTROMED, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title

 	
  

 

Ex. A - 1

ATTACHMENT TO
COMPLIANCE CERTIFICATE

This
Compliance Certificate is delivered under the Credit Agreement dated as of
November 7, 2011 (as amended, restated or other wise modified from time to
time, the “Credit Agreement”), between Electromed and U.S. Bank National
Association.

All
terms used in this Compliance Certificate shall have the meanings given them in
the Credit Agreement. 

The figures used in this
Compliance Certificate were determined as of _________________.

I certify that the following
amounts were correctly determined according to the Credit Agreement as of the
date set forth above:

 [1. Minimum EBITDA In Compliance
Yes _____ No ____

For the quarters ending
March 31, 2013, and June 30, 2013]

	
  

 	
  

 
	
EBITDA

 	
  

 

 [1. Fixed Charge Coverage Ratio In
Compliance Yes _____ No ____

For the quarter ending
September 30, 2013]

	
  

 	
  

 
	
  

 	
 For quarter end

 
	
 EBITDA

 	
  

 
	
 Plus:

 	
  

 
	
 Operating lease expense

 	
  

 
	
  

 	
  

 
	
 Less:

 	
  

 
	
 Cash Taxes

 	
  

 
	
 Cash Dividends/Cash distributions

 	
  

 
	
 Maintenance CAPEX (50% of Depreciation Expense)

 	
  

 
	
  

 	
  

 
	
 Total
 (A)

 	
  

 
	
  

 	
  

 
	
 Required Principal Payments

 	
  

 
	
 Plus Cash Interest Payments

 	
  

 
	
 Plus Rental or Lease Expense

 	
  

 
	
  

 	
  

 
	
 Total
 (B)

 	
  

 
	
  

 	
  

 
	
 Ratio of (A) to (B)

 	
  

 

2. No Additional Interest Bearing
Debt (Tested Quarterly) 

	
  

 	
  

 
	
  

 	
 In Compliance Yes _____ No _____

 

Ex. A - 2

I further certify that the
Borrower is in compliance with all other terms and conditions of the Agreement
and that no Event of Default or event that with notice or lapse of time would
be an Event of Default has occurred since the last Compliance Certificate
provided to the Bank.

	
  

 	
  

 	
  

 
	
 Electromed, Inc.

 	
  

 
	
  

 	
  

 	
  

 
	
 By 

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Title 

 	
  

 	
  

 

Ex. A - 3m8984746b.htm

MUELLER INDUSTRIES, INC.

AMENDMENT NO. 1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amendment No. 1 (this “Amendment”) to the Amended and Restated Employment Agreement (the “Employment Agreement”), dated October 30, 2008, by and between Mueller Industries, Inc. (the “Company”) and Gregory L. Christopher (the “Employee”) is entered into as of this 14th day of February 2013, to be effective as of the date hereof.

 

WHEREAS, the Company and the Employee are parties to the Employment Agreement; and

 

WHEREAS, each of the Company and the Employee wish to amend the Employment Agreement.

 

NOW, THEREFORE, the Employment Agreement is hereby amended as follows (with terms not otherwise defined in this Amendment having the same meaning as set forth in the Employment Agreement):

 

1. Amendment to the Employment Agreement.  Section 6 of the Employment Agreement shall be deleted in its entirety and replaced with the following:

 

“[Intentionally Omitted]”.

 

2. Ratification and Confirmation.  To the extent not amended hereby, the Employment Agreement is hereby ratified and confirmed in all respects and shall continue with full force and effect in accordance with its terms.

 

3. Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of Tennessee, without reference to principles of conflict of laws.

 

4. Headings.  Section headings are for convenience only and shall not be considered a part of this Amendment.

 

*           *           *

 

[Signature Page Follows]

 

  

  

  

IN WITNESS WHEREOF, this Amendment has been entered into as of the date first set forth above.

 

 

	  	
EMPLOYEE

 

 

	  	
/s/ Gregory L. Christopher   

	  	
Gregory L. Christopher

 

 

 

	  	
MUELLER INDUSTRIES, INC.

 

	  	  
	  	
/s/ Gary C. Wilkerson     

	  	
By:  Gary C. Wilkerson

	  	
Title: Vice President, General Counsel and Secretary

 

 

[Signature Page to Amendment No. 1 to Amended and Restated Employment Agreement]

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