Document:

EXHIBIT 4.7

 

THIS WARRANT, AND ANY SHARES OF
COMMON STOCK ACQUIRED UPON THE EXERCISE OF THIS WARRANT, HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY
OTHER SECURITIES LAWS.  THIS WARRANT HAS
BEEN ACQUIRED FOR INVESTMENT, AND NEITHER THIS WARRANT NOR ANY OF SUCH SHARES
MAY BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OF THEM UNDER THE ACT AND ANY OTHER APPLICABLE SECURITIES LAW, OR
RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO
THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
ACT. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE TRANSFERRED EXCEPT UPON
THE CONDITIONS SPECIFIED IN THIS WARRANT, AND NO TRANSFER OF THIS WARRANT OR
ANY OF SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS
SHALL HAVE BEEN COMPLIED WITH.

 

STOCK PURCHASE WARRANT

 

For 721,510 Shares

of the Common Stock of

American Medical Technologies, Inc.

 

BY THIS
WARRANT, American Medical Technologies, Inc., a Delaware corporation (the
“Company”), certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Bank One, N.A., a national
banking association (“Bank One”), along with its assigns, as set forth in
Section 12(a), (collectively, “Holder”) is entitled to subscribe for and
purchase from the Company, at the times and subject to the terms and conditions
set forth herein, a total of seven hundred thirty six thousand, two hundred
thirty four (721,510) fully paid and nonassessable shares of Common Stock, $.04
par value per share, of the Company (“Common Stock”), at an exercise price of
eleven cents ($.11) per share (the “Exercise Price”), subject to adjustment
from time to time pursuant to the provisions of Section 5 hereof.

 

This Warrant
is subject to the following provisions, terms and conditions:

 

1.                                       Definitions.  For the purpose of the Warrant, the
following terms, whether or not capitalized or underlined in the text of this
Warrant, shall have the following meanings:

 

“Commission”
shall mean the U.S. Securities and Exchange Commission or any other
governmental authority at the time administering the Securities Act.

 

“Company”
shall have the meaning specified in the introduction to this Warrant, and shall
include any corporation or business entity resulting from the merger,
consolidation or conversion of the Company.

 

“Fair
Market Price Per Share” shall mean the average of the closing sales prices,
if available, or the average of the bid and asked prices for the Common Stock
on the principal market therefor for the five trading days preceding the day
which is two business days prior to the day of exercise, or if no such price is
available, by an appraiser selected by the holder hereof and reasonably
acceptable to the Company and

 

 

such appraisal shall be the
sole expense of the Company.  The
determination of such appraiser shall be conclusive and binding on the Holder
hereof and the Company.

 

“Forbearance
Agreement” shall mean that Third Amended and Restated Forbearance Agreement
entered into between the Company and Bank One dated as of October 30, 2002.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar or
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.  Reference to a particular section of the
Securities Act shall include a reference to the comparable section, if any, of
any such similar or successor federal statute.

 

“Warrant(s)”
shall mean this Warrant issued by the Company, including all amendments thereto
and all warrants issued in exchange, transfer or replacement therefor.

 

“Warrant
Shares” shall mean the shares of Common Stock purchased or purchasable upon
the exercise of the Warrant.

 

2.                                       Vesting
and Term.  The rights represented by
this Warrant shall be fully vested, and the Warrant shall be immediately
exercisable, upon the execution of the Forbearance Agreement (the “Vesting
Date”).  The Warrant and the rights
represented hereby shall terminate at midnight, Central Time, on the date (the
“Expiration Date”) that is five years after the Vesting Date.

 

3.                                       Exercise;
Issuance of Certificates; Payment for Shares.  The rights represented by this Warrant may be exercised by the
Holder, in whole or in part, by the surrender of this Warrant, together with a
completed Exercise Agreement in the form attached hereto (“Exercise
Agreement”), during normal business hours on any business day at the principal
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of such Holder
appearing on the books of the Company) at any time prior to the Expiration Date
and upon payment to the Company by certified check or wire transfer in an
amount equal to the Exercise Price for the Warrant Shares to be purchased in
connection with such exercise.  The
Holder may, at its option, pay for the Warrant Shares by tendering Common Stock,
including Warrant Shares and the right to receive Warrant Shares, valued at
their Fair Market Price Per Share on the date of exercise, or any combination
of cash and Common Stock. The Company agrees that the shares so purchased shall
be and are deemed to be issued to the Holder or its designee (subject to the
transfer restrictions applicable to this Warrant or to Warrant Shares) as the
record owner of such shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for such shares as
aforesaid.

 

Certificates
for the Warrant Shares so purchased, representing the aggregate number of
shares specified in said Exercise Agreement, shall be delivered to the Holder
within a reasonable time after the rights represented by this Warrant shall
have been so exercised.  The stock
certificate or certificates so delivered shall be in such denominations as may
be requested by the Holder, shall be registered in the name of said Holder or
such other name as shall be designated by said Holder (subject to the transfer
restrictions applicable to this Warrant and to the Warrant Shares) and shall
bear a restrictive legend similar to that on this Warrant unless in the opinion
of counsel to the Holder such legend is not required in order to comply with
the Securities Act.  If this Warrant
shall have been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of said stock
certificates(s), deliver to said Holder a new Warrant representing the right to
purchase the number of shares of Common

 

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Stock with respect to which
this Warrant shall not then have been exercised.  The Company shall pay  all
expenses and charges payable in connection with the preparation, execution and
delivery of stock certificates (and any new Warrants) except that, in case such
stock certificates shall be registered in a name or names other than the Holder
of this Warrant or such Holder’s nominee, funds sufficient to pay all stock
transfer taxes which shall be payable in connection with the execution and
delivery of such stock certificates shall be paid by the Holder to the Company
at the time of delivery of such stock certificates by the Company as mentioned
above.

 

This Warrant shall
be exercisable only for a whole number of Warrant Shares.  No fractions of shares of Common Stock, or
scrip for any such fractions of shares, shall be issued upon the exercise of
this Warrant.  The Company shall pay a
cash adjustment in respect of such fractional interest in an amount equal to
the Fair Market Price Per Share of one share of Common Stock at the time of
such exercise multiplied by such fraction computed to the nearest whole cent.

 

4.                                       Shares
to be Fully Paid; Reservation of Shares. 
The Company covenants and agrees that all Warrant Shares will be duly
authorized and validly issued and upon issuance in accordance with the terms
and conditions hereof, will be fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof.  Without limiting the generality of the
foregoing, the Company covenants and agrees that it will from time to time take
all such action as may be required to assure that the par value per Warrant
Share is at all times equal to or less than the Exercise Price then in
effect.  The Company further covenants
and agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of issue upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant and any
other warrants.

 

5.                                       Reclassifications,
Consolidation, Merger or Sale of Assets. 
If the Company shall effect any reclassification or similar change of
outstanding shares of the Common Stock, (including without limitation, a
subdivision of the outstanding shares of Common Stock into a larger number of
shares of Common Stock or a combination of the outstanding shares of Common
Stock into a smaller number of shares of Common Stock) or a reorganization or a
consolidation or merger of the Company with another entity, or a conveyance of
all or substantially all of the assets of the Company, this Warrant shall,
after such capital reorganization, reclassification, consolidation, merger or
conveyance, be exercisable only for the number of shares of stock or other
properties, including cash, to which a holder of the number of shares of the
Common Stock deliverable upon exercise of this Warrant would have been entitled
upon such capital reorganization, reclassification, change, consolidation,
merger or conveyance if this Warrant had been exercised immediately prior to
the effective date of such event; and the Exercise Price then in effect shall
be adjusted to equal (A) the Exercise Price then in effect multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares of
Common Stock for which this Warrant is exercisable immediately after such
adjustment; and, in any such case, appropriate adjustments (as determined by
the Company’s Board of Directors) shall be made in the application of the
provisions set forth in this Section 5 with respect to the rights and interests
thereafter of the Holder of this Warrant to the end that the provisions set
forth in this Section 5 (including provisions with respect to changes in and
other adjustments of the exercise rights in this Section 5) shall thereafter be
applicable, as nearly as may be reasonable, in relation to any shares of stock
or other securities thereafter deliverable upon the exercise of this Warrant.
The Company shall give written notice to the Holder of any transaction within
the scope of this Section 5 promptly after the

 

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effective date therefor and
provide in such written notice a brief description of the terms and conditions
of such transaction.

 

6.                                       Certain
Agreements of the Company.  The
Company covenants and agrees that:

 

(a)                                  Prohibited
Actions.  The Company will not, by
amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
of this Warrant.

 

(b)                                 Successors
and Assigns.  This Warrant will be
binding upon any entity succeeding to the Company by merger or consolidation.

 

(c)                                  Issuance
of Warrant Shares.  If the issuance
of any Warrant Shares required to be reserved for purposes of exercise of this
Warrant is required to be registered with or approved by any federal
governmental authority under any federal or state law (other than any
registration under the Securities Act or state securities laws), before such
shares may be issued upon exercise of this Warrant, the Company will, at its
expense, use its best efforts to cause such shares to be so registered or
approved, at such time, so that such shares may be issued in accordance with
the terms hereof.

 

7.                                     Registration
Rights.  The Company will, upon
written request to it by the Holder made at any time after the first
anniversary date of the issuance of this Warrant, promptly file and use all
commercially reasonable efforts to be declared effective, a registration
statement on Form S-3 (or any successor short-form registration) registering
all or a portion of the Warrant Shares under the Securities Act, but only if the
Company is able to use Form S-3 in such registration, and subject to the
following limitations and conditions:

 

(a)                                  Company’s
Obligations.  The Company will make
commercially reasonable efforts to (i) cause the registration statement to
become and remain effective for a period of not less than two (2) years, (ii)
furnish to the Holder copies of the registration statement, and all amendments
and supplements thereto, and a sufficient number of prospectuses, and all
amendments and supplements thereto, to facilitate the disposition of the
Warrant Shares, (iii) notify the Holder of all material developments and
communications from the Commission in connection with such filing, (iv)
register or qualify the Warrant Shares under such other securities or blue sky
laws of such jurisdictions in the United States as the Holder reasonably
requests in light of Holder’s intended plan of distribution and (v) obtain the
withdrawal of any order suspending the effectiveness of the registration
statement or the qualification of any shares covered thereby.

 

(b)                                 Company
Control.  Except as otherwise
provided herein, the Company shall have sole control in connection with the
preparation, filing, withdrawal, amendment or supplementing of the registration
statement, the selection of any underwriters and the distribution of
prospectuses and may include in such registration statement shares issued
pursuant to the exercise of any other warrants issued by the Company for which
registration by the Company is required.

 

(c)                                  Single
Demand.  The Company shall be
required to effect a registration on only one occasion, provided that such
registration statement filed by the Company is declared effective by the
Commission and remains effective for a period of at least two (2) years.

 

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(d)                                 Expenses.  The Company shall pay all expenses incurred
in connection with such registration, except for the fees and expenses of any
underwriter used by Holder in the sale.

 

(e)                                  Postponement.  The Company shall be entitled to postpone
such registration if and to the extent that (i) its Board of Directors shall
determine that such registration would interfere with a pending corporate
transaction or (ii) the Company is in possession of material nonpublic
information, the disclosure of which the Company believes would not be in the
best interests of the Company; provided that neither such postponement shall
exceed 120 days.

 

(f)                                    Use
of Rule 144.  The Company shall not
be obligated to register the Warrant Shares if the Holder is able sell the
Warrant Shares (or the portion thereof that it desires to register) in the open
market pursuant to the exemption provided by Rule 144(k) under the Securities
Act, in the reasonable judgment of outside counsel acceptable to both Holder
and the Company.

 

(g)                                 Holder’s
Obligations.  In order to have the
Warrant Shares registered by the Company, the Holder must furnish accurate and
complete information regarding the Holder and the distribution of the Warrant
Shares as requested by the Company for inclusion in the registration statement,
and enter into such underwriting agreements, questionnaires, powers of
attorney, indemnities and other documents 
as are then customary in such offerings.

 

8.                                       Piggyback Registration Rights.  At
any time following the date hereof, whenever the Company proposes to register
any Common Stock for its own or the account of others under the Securities Act
for a public offering, other than (i) any shelf registration of shares to be
used as consideration for acquisitions of additional businesses by the Company
and (ii) registrations relating to employee benefit plans, the Company shall
give the Holder prompt written notice of its intent to do so.  Upon the written request of the Holder given
within 15 business days after receipt of such notice, the Company, at its sole
expense, shall cause to be included in such registration all Warrant Shares
(including any shares of Common Stock issued as a dividend or other
distribution with respect to, or in exchange for, or in replacement of such
Warrant Shares) which the Holder requests; provided, however, if the Company is
advised in writing in good faith by any managing underwriter of an underwritten
offering of the securities being offered pursuant to any registration statement
under this Section 8 that the number of shares to be sold by persons other than
the Company is greater than the number of such shares which can be offered
without adversely affecting the offering, the Company may reduce pro rata the
number of shares offered for the accounts of such persons, including the Holder
(based upon the number of shares held by such person) to a number deemed
satisfactory by such managing underwriter. 
In consideration for the Company agreeing to its obligations under this
Section 8, the Holder agrees that, effective upon the request of the
underwriters managing the Company’s public offering, the Holder shall be
obligated, so long as all executive officers and directors of the Company are
bound by a comparable obligation, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any shares of
Common Stock without the prior written consent of such underwriters, for such
period of time (not to exceed one hundred twenty (120) days) from the effective
date of such public offering as the underwriters may specify.  Notwithstanding the foregoing, Section 7(f)
shall apply to this Section 8.

 

9.                                       Issue
Tax.  The issuance of certificates
for Warrant Shares upon the exercise of this Warrant shall be made without
charge to the Holder of such Warrant or such shares for any issuance tax in
respect thereof, provided that the Company shall not be required to pay any tax
which may be payable in

 

5

 

respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Holder of the Warrant exercised.

 

10.                                 Closing
of Books.  The Company will at no
time close its transfer books against the transfer of the Warrant, or in any
manner interfere with the timely exercise of the Warrant.

 

11.                                 No
Rights or Liabilities as a Shareholder. 
This Warrant shall not entitle the Holder to any voting rights or other
rights as a shareholder of the Company. 
No provision of this Warrant, in the absence of affirmative action by
the Holder to purchase Warrant Shares, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Exercise Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.

 

12.                                 Transfer
and Exchange.

 

(a)                                  No
Transfer of Warrant.  This Warrant
may not be assigned, offered, sold, pledged or otherwise transferred, except to
an affiliate of Bank One.

 

(b)                                 Warrant
Exchangeable for Different Denominations. 
This Warrant is exchangeable, upon the surrender hereof by the Holder at
the principal office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder), for new
Warrants of like tenor representing in the aggregate the right to subscribe for
and purchase the number of shares of Common Stock which may be subscribed for
and purchased hereunder, each of such new Warrants to represent the right to
subscribe for and purchase such number of shares as shall be designated by said
Holder at the time of such surrender.

 

(c)                                  Replacement
of Warrant.  Upon receipt of written
notice from the Holder or other evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity
agreement, or other indemnity reasonably satisfactory to the Company, or, in
the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company will execute and deliver, in lieu thereof, a new Warrant
of like tenor.

 

(d)                                 Cancellation;
Payment of Expenses.  Upon the
surrender of this Warrant in connection with any exchange, transfer or
replacement as provided in this Section 12, this Warrant shall be promptly
canceled by the Company.  The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses and charges payable in connection with the preparation, execution and
delivery of Warrants pursuant to this Section 12.

 

13.                                 Notices.  All notices and other communications
required or permitted hereunder shall be in writing, and shall be deemed to
have been delivered on the date delivered by hand, telegram, facsimile or by
similar means, on the first day following the day when sent by recognized
courier or overnight delivery service (fees prepaid), or on the third day
following the day when deposited in the mail, registered or certified (postage
prepaid), addressed: (i) if to the Holder, at the registered address of the
Holder as set forth in the register kept by the Company at its principal office
with respect to the Warrant, or to such other address as the Holder may have
designated to the Company in writing, and (ii) if to the Company, at

 

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5555 Bear Lane, Corpus Christi,
Texas 78405; Attn: Chief Executive Officer, or such other address as the
Company may have designated in writing to the Holder.

 

14.                                 Governing
Law.  This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Texas, without regard to principles of
conflicts of laws.

 

15.                                 Remedies.  The Company stipulates that the remedies at
law of the Holder in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

 

16.                                 Miscellaneous.

 

(a)                                  Amendments.  This Warrant and any provision hereof may be
changed, waived, discharged or terminated, but only by an instrument in writing
signed by the party (or any predecessor in interest thereof) against whom
enforcement of the same is sought.

 

(b)                                 Descriptive
Headings.  The descriptive headings
of the several sections of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the provisions
hereof.

 

(c)                                  Conflict
with Forbearance Agreement.  In the
event of any conflict between the terms hereof and the terms of the Forbearance
Agreement regarding this Warrant, the terms hereof shall control.

 

 

IN WITNESS
WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer effective as of October 30, 2002.

 

	
   

  	
   

  	
  American
  Medical Technologies, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Roger Dartt

  	
   

  
	
   

  	
   

  	
   

  	
  Roger Dartt,
  President and CEO

  

 

7

 

FORM OF EXERCISE AGREEMENT

 

[DATE]

 

American Medical Technologies,
Inc.

5555 Bear Lane

Corpus Christi, Texas 78405

Attention: Chief Executive Officer

 

The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase
             shares
of Common Stock covered by such Warrant, and makes payment herewith in full
therefor at the price per share provided by such Warrant in cash, Warrant
Shares or the right to receive Warrant Shares, as indicated below.

 

Method of Payment:
                                                     

 

	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
  Company:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
  Social
  Security or Tax ID No.

  	
   

  
							

 

8Exhibit 4.12

 

FOURTH AMENDED AND RESTATED FORBEARANCE
AGREEMENT

 

This Fourth Amended and Restated Forbearance Agreement (the
“Agreement”) is made effective the 1st day of February, 2003, and is
by and among American Medical Technologies, Inc. a Delaware corporation (the
“Borrower”) and Bank One, N. A. (formerly known as Bank One, Michigan
and collectively with its predecessors and assignors shall be referred to
herein as the “Lender”).

 

W I T N E S S E T H:

 

In consideration of the sum of Ten Dollars ($10.00), the mutual
covenants and agreements contained herein and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

1.                                       Recitations.

 

1.1                                 The Credit Agreement.  On or
about September 21, 2000, the Lender and the Borrower executed a certain Line
of Credit Agreement (the “Credit Agreement”) providing for certain loans made
by Lender to Borrower and evidenced by a Revolving Business Credit Note (the
“Note”). Among other documents executed contemporaneously with the Credit
Agreement were a Continuing Security Agreement and UCC-1 Financing Statements
(collectively, the “Loan Documents”).

 

1.2                                 The First Amendment.  On or
about March 20, 2001, the Lender and Borrower executed that certain letter agreement
constituting an amendment to the Credit Agreement (the “First Amendment”)
providing for certain amendments to the Credit Agreement as set forth therein.

 

1.3                                 The Second Amendment.  On or about June 25, 2001, the Lender and
Borrower executed that certain letter agreement constituting an amendment to
the Credit Agreement (the “Second Amendment”) providing for certain amendments
to the Credit Agreement as set forth therein.

 

1.4                                 The Credit Card
Balance.  Borrower is further
indebted to Lender in the approximate amount of $140,134.62 resulting from
charges made by Borrower utilizing a business charge card line of credit (the
“Credit Card Balance”).

 

1.5                                 Payable Status.  All obligations of Borrower are in default
and are presently due and payable and Borrower has requested that Lender: (a)
forbear from taking any actions to collect the amounts due under the Loan
Documents, and (b) agree to the other terms and conditions set forth herein.
The Lender is willing to agree to the Borrower’s request on the condition that
the Borrower fully and faithfully perform its obligations under the Loan
Documents, including but not limited to, the Credit Agreement, as amended.

 

1.6                                 The Forbearance
Agreement.  At Borrower’s request, Borrower and Lender entered into that certain
Forbearance Agreement dated November 6, 2001 (the “Forbearance Agreement”)
whereby the Lender agreed to forbear from exercising certain of its rights and
remedies under the

 

 

Loan Documents for a period ending on
December 20, 2001 in reliance upon the covenants,
representations, and warranties of Borrower contained in the Forbearance
Agreement.

 

1.7                                 The Amended & Restated Forbearance Agreement.  At
Borrower’s request, Borrower and Lender
entered into that certain Amended and Restated Forbearance Agreement dated
December 20, 2001 (the “A&R Forbearance Agreement”) whereby the Lender
agreed to forbear from exercising certain of its rights and remedies under the
Loan Documents for a period ending on February 18, 2002 in reliance upon the covenants,
representations, and warranties of Borrower contained in the A&R Forbearance Agreement.  The
A&R Forbearance Agreement
amended and restated the terms and provisions of the Forbearance
Agreement.

 

1.8                                 The Second Amended & Restated Forbearance
Agreement.  At Borrower’s request, Borrower and Lender entered into that certain
Second Amended and Restated Forbearance Agreement dated February 18, 2002 (the
“Second A&R Forbearance Agreement”) whereby the Lender agreed to forbear
from exercising certain of its rights and remedies under the Loan Documents for
a period ending on September 15, 2002 in reliance upon the covenants,
representations, and warranties of Borrower contained in the Second A&R Forbearance Agreement.  The
Second A&R Forbearance Agreement amended and restated the terms and
provisions of the A&R Forbearance Agreement.

 

1.9                                 The Third Amended & Restated Forbearance
Agreement.  At Borrower’s request, Borrower and Lender entered into that certain
Third Amended and Restated Forbearance Agreement dated October 30, 2002 (the
“Third A&R Forbearance Agreement”) whereby the Lender agreed to forbear
from exercising certain of its rights and remedies under the Loan Documents for
a period ending on January 31, 2003 in reliance upon the covenants,
representations, and warranties of Borrower contained in the Third A&R Forbearance Agreement.  As part
of the consideration for Lender agreeing, at Borrower’s request, to enter into
the Third A&R Forbearance
Agreement, the Borrower granted Lender or a designated subsidiary of Lender a
Stock Purchase Warrant dated October 30, 2002, for the right to purchase
721,510, shares of the Borrower’s common stock pursuant to the terms and
conditions as set forth in the Stock Purchase Warrant.  The
Third A&R Forbearance Agreement amended and restated the terms and
conditions of the Second A&R Forbearance Agreement.  This Agreement is intended to amend and
restate the terms and provisions of the Third A&R Forbearance
Agreement.

 

1.10                           Borrower’s Request.  Borrower continues to be in default
in the payment and/or performance of the Note and other Loan Documents.  Borrower acknowledges that the indebtedness
evidenced by the Note is due and owing to the Lender without right of setoff,
and such indebtedness has not been paid in accordance with the terms of the
Loan Documents.  Borrower has requested
that the Lender forebear from exercising its rights and remedies under the Loan
Documents for a period of time as specified herein in reliance upon the
covenants, representations, and warranties of Borrower and for other good and
valuable consideration.

 

The term “Loan Documents” shall include the Credit Agreement, the Note,
the First Amendment, the Second Amendment, the Credit Card Balance, the
Forbearance Agreement, the A&R Forbearance Agreement, the Second A&R
Forbearance Agreement, the Third A&R Forbearance Agreement, this Agreement
and all guaranties and other writings, documents, instruments, security
agreements contemplated herein or therein, respectively.  The term “Obligations” shall include the
Note, the Credit

 

2

 

Card Balance, all obligations as otherwise set forth in any of the Loan
Documents and all other obligations pursuant to which Borrower or any guarantor
may owe performance or payment to Lender. 
The term “Indebtedness” shall include the Note, the Credit Card Balance
and all other indebtedness owing from Borrower or any guarantor to Lender.

 

2.                                       Acknowledgment
of Amounts Due and Maturity Date.  
Lender and Borrower acknowledge that as of the beginning of business on
February 25, 2003, the outstanding balance in respect of the Indebtedness was
as follows:

 

	
   

  	
   

  	
  Principal

  	
   

  	
  Accrued
  and Unpaid Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note:

  	
   

  	
  $

  	
  1,655,656.25

  	
   

  	
  $

  	
  9,485.53

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit Card Balance:

  	
   

  	
  $

  	
  140,134.62

  	
   

  	
   

  	
   

  
								

 

Subject to Section 16 hereof,
Borrower waives any and all rights to notice of payment default or any other
default, protest and notice of protest, dishonor, diligence in collecting and
the bringing of suit against any party, notice of intention to accelerate,
notice of acceleration, demand for payment and other notices whatsoever
regarding the Credit Agreement, as amended, the Indebtedness, or any other Loan
Documents, and further waives any claims that any notices previously given are
insufficient for any reason.  Borrower
further agrees that the Indebtedness set forth above is presently due and
payable in full to Lender without discount or offset, and any claims or
defenses thereto are waived and released herein.

 

3.                                       No
Further Advances.  Borrower acknowledges
and agrees that it shall not be entitled to, nor shall Borrower request, any
additional advances under the Credit Agreement, the Note, or any other Loan
Documents.  Furthermore, Borrower shall
not request nor shall Lender be obligated to issue any further or additional
letters of credit.

 

4.                                       No
Waiver. The execution, delivery and
performance of this Agreement by Lender and the acceptance by Lender of
performance of Borrower hereunder (a) shall not constitute a waiver or release
by Lender of any default that may now or hereafter exist under the Loan
Documents, (b) shall not constitute a novation of the Loan Documents as it is
the intent of the parties to modify the Loan Documents as expressly set out
herein, and (c) except as expressly provided in this Agreement, shall be
without prejudice to, and is not a waiver or release of, Lender’s rights at any
time in the future to exercise any and all rights conferred upon Lender by the
Loan Documents or otherwise at law or in equity, including but not limited to
the right to accelerate the Indebtedness, if not already accelerated, and to
institute collection proceedings against Borrower and/or any right against any
other person or entity not a party to this Agreement.  Similarly, the execution, delivery, and performance of this
Agreement by Borrower and the acceptance by Borrower of the performance by
Lender hereunder shall not, subject to the express provisions of this
Agreement, constitute a waiver or release of any of Borrower’s rights under the
Loan Documents; provided, however, that Borrower waives any and all claims now
or hereafter arising from or related to any delay by Lender in exercising any
rights or remedies under the Loan Documents, including, without limitation, any
delay in foreclosing on any collateral securing the Indebtedness.

 

5.                                       Forbearance.
So long as this Agreement is not terminated as provided herein, the Lender
agrees not to foreclose or attempt to foreclose any collateral securing the
Indebtedness, institute suit for

 

3

 

collection of the Indebtedness
against Borrower or any guarantor, or exercise any other remedies available to
it under the Loan Documents or under applicable law for a period of time
commencing on the date hereof and extending through and including May 31, 2003
at 5:00 p.m. (the “Forbearance Period”). 
Upon termination of the Forbearance Period, or otherwise under the
provisions of this Agreement, or if all amounts due and owing under the Credit
Agreement, the Indebtedness or other Loan Documents, are not paid in full on or
before the expiration of the Forbearance Period, Lender may seek to foreclose
upon any collateral and to exercise any other remedies to which Lender may be
entitled under the Loan Documents, or applicable law to collect amounts due
under the Indebtedness, the Credit Agreement or any other Loan Documents.  Borrower agrees that Borrower will not
during the Forbearance Period, initiate any action of any kind against Lender
with respect to the Loan Documents, exercise any remedy available under the
Loan Documents or otherwise, or make or suffer to exist any type of demand upon
Lender with respect to the Obligations.

 

6.                                       Interest
Rate.  During the Forbearance
Period, all Indebtedness owed by Borrower to Lender under the Loan Documents shall continue to bear interest at the per annum
rate equal to the sum of the Prime Rate plus four percent (4.0%).  The Prime Rate shall be that variable per
annum rate announced, from time to time, by the Lender as its Prime Rate.

 

7.                                       Interest
Payments. Borrower shall continue to make the interest payments required by
the Forbearance Agreement on or before the 15th day of each month
until the Indebtedness is paid in full. 
Such payments shall continue on March 15, 2003, at which time the
Borrower shall pay all accrued and unpaid interest due on the Indebtedness.

 

8.                                       Final Payment.  The Borrower shall pay all
outstanding principal and all accrued and unpaid interest on or before the end
of the Forbearance Period.

 

9.                                       Loan
Fee.  Borrower acknowledges and
affirms that a loan fee in the amount of $50,000.00 is due and owing to the
Lender pursuant to the terms of the Second A&R Forbearance Agreement (the
“Loan Fee”).  Borrower shall pay Lender
the Loan Fee on or before the expiration of the Forbearance Period or upon an
event of default as set forth herein, and such payment shall not be applied to
the payment of the Indebtedness. Notwithstanding the foregoing, if the Borrower pays the Lender the entire outstanding
Indebtedness on or before the expiration of the Forbearance Period and provided
no event of default has occurred, the Lender agrees to waive the payment of the
Loan Fee.

 

10.                                 Forbearance
Fee.  Borrower acknowledges and
affirms that a forbearance fee in the aggregate amount of $100,000.00 is due
and owing to the Lender pursuant to the terms of the Third A&R Forbearance
Agreement (the “Forbearance Fee”).  The
Borrower shall pay the Lender the Forbearance Fee on or before the expiration
of the Forbearance Period or upon an event of default as set forth herein, and
such payment shall not be applied to the payment of the Indebtedness.  Notwithstanding the foregoing, if the Borrower pays the Lender the entire outstanding
Indebtedness on or before the expiration of the Forbearance Period and provided
no event of default has occurred, the Lender agrees to waive the payment of the
Forbearance Fee.

 

11                                    Tangible
Net Worth.   Paragraph 6.3(H) of the
Credit Agreement is amended to read as follows:  “Permit its Tangible Net Worth plus Subordinated Debt to be less
than $2,000,000.00.”

 

4

 

12.                                 Borrowing
Base.        Notwithstanding any other
provision of this Agreement or the Loan Documents, the aggregate principal
amount of the Indebtedness outstanding at any one time shall not exceed the
Borrowing Base.   Should the
Indebtedness exceed the Borrowing Base, Borrower shall immediately prepay the
excess amount to Lender.  “Borrowing
Base” means the sum of 75% of Eligible Accounts and 40% of Eligible
Inventory.  “Eligible Accounts” means an
Account of the Borrower: (i) which arises from a bona fide, outright sale of
inventory or for services performed, or expenses incurred in the normal course
of business; (ii) which is based upon a valid, enforceable and legally binding
order or contract; (iii) as to which an invoice for payment has been sent to
the account debtor and for which the account debtor is unconditionally
obligated and liable to make payment thereof; (iv) in and to which the rights
of the Borrower are absolute and not subject to any assignment, claim, lien or
security interest (except in favor of Lender); (v) except as otherwise agreed
by Lender, which is not an intracompany account or an account receivable
between the Borrower and any affiliate of the Borrower; (vi) which is not
evidenced by any note, chattel paper, trade acceptance, draft, check or other
instrument with respect thereto or in payment thereof; (vii) except as
otherwise agreed by Lender, as to which the account Borrower thereof has not
died and is not the subject of dissolution, liquidation, termination of
existence, insolvency, business failure, receivership, bankruptcy, readjustment
of debt, assignment for the benefit of creditors or similar proceedings; (viii)
which has not been outstanding for more than 90 days from date of invoice; (ix)
which is not owed by an account debtor not a resident of the United States; (x)
which is not an account owed by a debtor from which 20% or more of the
aggregate amount owed from such debtor is more than 90 days past due from the
date of invoice; (xi) which is not owed by any governmental entity; (xii) which
is not owed by a contractor; (xiii) which is not an account that is bonded or
secured by a bond; and (xiv) which is not an account otherwise unacceptable to
Lender.  At any particular date, the
Eligible Accounts shall be the sum of the unpaid principal balance of all of
the Eligible Accounts, as defined above. 
“Eligible Inventory” shall mean that Inventory physically located in the
United States owned by the Borrower and in which Lender holds a perfected first
priority security interest that constitutes: (a) finished goods in marketable
condition; and (b) raw materials reasonably necessary to meet the Borrower’s
production requirements for a period of twelve (12) months.  For purposes hereof, Eligible Inventory
shall be valued at the lower of cost or market value.

 

13.                                 Borrowing
Base Certificate and Compliance Statement.   Prior to the 20th day of each and every month
hereafter, the Borrower shall provide to Lender a Borrowing Base Certificate
and Compliance Statement in the form attached hereto as Exhibit “A” signed by
an officer of Borrower.

 

14.                                 Tax
Refunds.  Upon the first to occur of
an event of default as set forth in Section 21 of this Agreement or the termination
of the Forbearance Period, the Borrower shall pay Lender 50% of any federal or
state tax refunds from any governmental entity (the “Refunds”) including, but
not limited to, 50% of the $202,000.00 in Refunds received by Borrower before
the date of this Agreement.  Any refund
payment received by Lender shall be applied to the payment of the Indebtedness.

 

15.                                 Purchase Agreement.  As a
condition for Lender agreeing to enter this Agreement, Borrower agrees that it
shall execute a purchase and sale agreement regarding the sale of Borrower on
or before April 15, 2003.  If Borrower
fails to execute a purchase and sale agreement by April 15, 2003, this
Agreement shall automatically terminate on such date.

 

16.                                 Compliance with Loan Documents. During the term of this Agreement, Borrower
shall fully and faithfully comply with all of the terms of the Loan Documents
including the Forbearance

 

5

 

Agreement,
the A&R Forbearance Agreement, the Second A&R Forbearance Agreement and
the Third A&R Forbearance Agreement, the terms of which shall remain in
full effect unless modified herein. 
Upon Borrower’s failure to fully and faithfully timely pay Lender any of
the payments set forth in this Agreement, the term of this Agreement shall
immediately end and terminate without the necessity of notice or demand, and
Lender shall be entitled to pursue any and all remedies.  Upon the occurrence of Borrower’s failure to
fully and faithfully perform any other obligation with respect to the Loan
Documents, the Borrower shall be entitled to such notice and opportunity to
cure, if any, as provided in the Loan Documents.

 

17.                                 Patents.  Borrower hereby agrees that it will take any
action reasonably requested by the Lender to insure the attachment, perfection
and first priority of, and the ability of the Lender to enforce, the Lender’s
security interest in all of the Borrower’s patents received, patent
applications or patents that are pending and other intellectual property
including, without limitation, any filings that may need to be made with the
United States Patent and Trademark Office, any other governmental entity or
agency or any other entity or agency of any kind.

 

18.                                 Representations and Warranties. In order to induce Lender to execute,
deliver, and perform this Agreement, Borrower warrants and represents to Lender
that:

 

(a)                                  this Agreement is not being made or entered into
with the actual intent to hinder, delay, or defraud any entity or person;

 

(b)                                 this Agreement is not intended by the parties to
be a novation of the Loan Documents and, except as expressly modified herein,
all terms, conditions, rights and obligations as set out in the Loan Documents
are hereby reaffirmed and shall otherwise remain in full force and effect as originally
written and agreed;

 

(c)                                  no action or proceeding, including, without
limitation, a voluntary or involuntary petition for bankruptcy under any
chapter of the Federal Bankruptcy Code, has been instituted by or against the
Borrower;

 

(d)                                 to
the best of Borrower’s knowledge, and with the sole exception of financial
statements projecting profitability for the periods ending September 30, 2002,
and December 31, 2002, all balance sheets, and cash flow statements, and all
information provided by Borrower to Lender prior to the date hereof, including,
without limitation, all financial statements, balance sheets, and cash flow
statements, were, at the date of delivery, and are, as of the date hereof, true
and correct in all material respects. 
Borrower recognizes and acknowledges that Lender is entering into this
Agreement based in part on the financial information provided to Lender by
Borrower and that the truth and correctness of that financial information is a
material inducement to Lender in entering into this Agreement.  During the term of this Agreement, Borrower
agrees to advise Lender promptly in writing of any and all new information,
facts, or occurrences that would in any way materially supplement, contradict,
or affect any financial statements, balance sheets, cash flow statements, or
similar items furnished to Lender;

 

(e)                                  this
Agreement and the Loan Documents constitute the entire agreement among Lender
and Borrower with respect to this matter;

 

6

 

(f)                                    Borrower
hereby reaffirms to Lender that Lender has a perfected first priority secured
interest in all of Borrower’s patents received, applied for or that are pending
and other intellectual property and that Lender has the ability to enforce
Lender’s security interest in such patents and other intellectual property; and

 

(g)                                 attached
hereto as Exhibit “B” is a complete list of all of Borrower’s patents that have
been received, applied for or that are pending and Borrower confirms that no
other patents, patent applications or pending patents exist.

 

19.                                 Bankruptcy.   In entering into this
Agreement, Borrower and Lender hereby stipulate, acknowledge and agree that
Lender gave up valuable rights and agreed to forbear from exercising legal
remedies available to it in exchange for the promises, representations,
acknowledgments and warranties of Borrower as contained herein and that Lender
would not have entered into this Agreement but for such promises,
representations, acknowledgments, agreements, and warranties, all of which have
been accepted by Lender in good faith, the breach of which by Borrower in any
way, at any time, now or in the future, would admittedly and confessedly
constitute cause for dismissal of any such bankruptcy petition pursuant to 11 U.S.C.
§ 1112(b).  As additional consideration
for Lender agreeing to forbear from immediately enforcing its rights and
remedies under this Agreement and in the Loan Documents, including but not
limited to the institution of foreclosure or collection proceedings, Borrower
agrees that in the event a bankruptcy petition under any Chapter of the
Bankruptcy Code (11 U.S.C. §101, et  seq.) is filed by or against
any Borrower at any time after the execution of this Agreement, Lender shall be
entitled to the immediate entry of an order from the appropriate bankruptcy
court granting Lender complete relief from the automatic stay imposed by §362
of the Bankruptcy Code (11 U.S.C. §362) to exercise its foreclosure and other
rights, including but not limited to obtaining a foreclosure judgment and
foreclosure sale, upon the filing with the appropriate court of a motion for
relief from the automatic stay with a copy of this Agreement attached
thereto.  Borrower specifically agrees
(i) that upon filing a motion for relief from the automatic stay, Lender shall
be entitled to relief from the stay without the necessity of an evidentiary
hearing and without the necessity or requirement of the Lender to establish or
prove the value of any collateral, the lack of adequate protection of its
interest in any collateral, or the lack of equity in any collateral; (ii) that
the lifting of the automatic stay hereunder by the appropriate bankruptcy court
shall be deemed to be “for cause” pursuant to §362(d)(1) of the Bankruptcy Code
(11 U.S.C. §362 (d)(1); and (iii) that Borrower will not directly or indirectly
oppose or otherwise defend against Lender’s efforts to gain relief from the
automatic stay. This provision is not intended to preclude Borrower from filing
for protection under any Chapter of the Bankruptcy Code.  The remedies prescribed in this paragraph
are not exclusive and shall not limit Lender’s rights under the Loan Documents,
this Agreement or under any law.  All of
the above terms and conditions have been freely bargained for and are all
supported by reasonable and adequate consideration and the provisions herein
are material inducements for Lender entering into this Agreement.

 

20.                                 Release.  Borrower hereby remises, releases, and
forever discharges Lender, its successors and assigns, its officers, directors,
employees, agents and attorneys (collectively, “Released Parties”) of and from
all actions, causes of action, suits, proceedings, debts, contracts, claims,
damages, liability and demands whatsoever, known or unknown, in law or equity,
which Borrower ever had or now has, by reason of any matter, cause, or thing
whatsoever arising from the actions or inactions of the Released Parties prior
to the date hereof including any matter relating to the Agreement, the Loan
Documents (collectively, “Released Matters”); and Borrower covenants not to sue
any of the Released Parties with respect to the Released Matters.  The release and covenant not to sue set
forth in this Section are intended by the parties to be as

 

7

 

broad and
comprehensive as possible.  However,
this release will not cover any intentional torts or acts of gross negligence.

 

21.                                 Default.  Lender shall be entitled to pursue each and
every remedy hereunder and under the Loan Documents, at Lender’s sole option,
upon the occurrence of any of the following:

 

(a)                                  Borrower files a petition for bankruptcy under
any chapter of the Federal Bankruptcy Code or takes advantage of any other
debtor relief law, or an involuntary petition for bankruptcy under any chapter
of the Federal Bankruptcy Code is filed against Borrower, or any other judicial
action is taken with respect to Borrower by any creditor;

 

(b)                                 Lender discovers that any representation or
warranty made herein by Borrower was or is untrue, incorrect or misleading in
any material respect;

 

(c)                                  After
the date of this Agreement, and except for the financial covenants set forth in
Section 6.3 (I) and (J) of the Credit Agreement, Borrower’s breach or default
in the performance of any covenant or agreement contained in this Agreement or
the Loan Documents;

 

(d)                                 Lender
receives any draft or request for payment in respect of any letter of credit.

 

(e)                                  Borrower’s failure to comply with any of the
terms and conditions of this Agreement.

 

22.                                 Authorization To File Financing Statements. The Borrower hereby irrevocably
authorizes Lender at any time and from time to time to file in any Uniform
Commercial Code jurisdiction any financing statements and amendments thereto
that: (i) indicate the collateral as that set forth in the Loan Documents, and
(ii) contain any other information required by part 5 of Article 9 of the
Uniform Commercial Code for the sufficiency or filing office acceptance of any
financing statement or amendment.  The
Borrower agrees to furnish any of the foregoing information to the Lender
promptly upon request. The Borrower ratifies its authorization for the Lender
to have filed any like initial financing statements or amendments thereto if
filed prior to the date hereof.  The Lender
may add any supplemental language to any such financing statement as the Lender
may determine to be necessary or helpful in acquiring or preserving rights
against third parties.

 

23.                                 Miscellaneous.

 

23.1  Successors and Assigns. All of the grants, covenants,
terms, conditions and agreements hereof shall be binding upon and inure to the
benefit of all of the assigns and successors in interest of the parties hereto.

 

23.2                           Modification.  Neither this Agreement nor any provision hereof may be changed,
altered, waived, amended, or discharged orally, but only by an instrument
reduced to writing, signed by all parties hereto.

 

23.3                           Choice of Law.  It is the intention of the
parties hereto that the laws of the State of Michigan shall govern the validity
of this Agreement, construction of
its terms and the interpretation of the rights and duties of the parties.

 

8

 

23.4                           Paragraph Headings. 
Headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this agreement.

 

23.5                           Authority.  Each party, for itself, its
successors and assigns, hereby represents and warrants that it has the full
capacity and authority to enter into, execute, deliver and perform this Agreement, and that such execution, delivery and
performance does not violate any contractual or other obligation by which it is
bound.

 

23.6                           Controlling Agreement.  This
Agreement shall be construed to govern and control over any inconsistent
provisions that may be contained in the Agreement or any other Loan Documents.

 

23.7                           Expenses.  Borrower agrees to pay all
costs and expenses incurred by Lender in connection with this Agreement,
including charges for recording, filing, appraisal and legal fees.

 

THIS AGREEMENT REPRESENTS THE
FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR ORAL OR WRITTEN, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS AMONG THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  MEDICAL TECHNOLOGIES, INC.

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger W.
  Dartt

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  BANK ONE, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Tipton J. Burch

  	
   

  

 

9

 

EXHIBIT
“A”

 

BORROWING BASE
CERTIFICATE AND COMPLIANCE STATEMENT

 

	
   

  	
  BORROWING BASE CALCULATION

  

 

	
  DATE:

  	
   

  	
                
        ,        

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Accounts Receivable

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less the Following:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Invoices
  over 90 days old

  	
   

  	
  $

  	
                      

  	
   

  
	
  Intracompany
  Accounts

  	
   

  	
  $

  	
                      

  	
   

  
	
  Affiliate
  Accounts

  	
   

  	
  $

  	
                      

  	
   

  
	
  Foreign Accounts

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  subject to any assignment, claim, lien or security interest (except in favor
  of Bank)

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  evidenced by any note, chattel paper, trade acceptance, draft check or other
  instrument

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  in which the account debtor thereof has died or is the subject of
  dissolution, liquidation, termination of existence, insolvency, business
  failure, receivership, bankruptcy, readjustment of debt, assignment for the
  benefit of creditors or similar proceedings

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  which owed by an account debtor from which 20% or more of the aggregate
  amount owed from such debtor is more than 90 days past due from the date of
  invoice

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  owed by a Contractor

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  that are bonded or secured by a bond

  	
   

  	
  $

  	
                      

  	
   

  
	
  Receivables
  owed by any type of governmental entity

  	
   

  	
  $

  	
                      

  	
   

  
	
  Other
  ineligible accounts as specified by Bank

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts Receivable:

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Multiplied
  by 75% eligibility factor

  	
   

  	
  X .75

  	
   

  

 

10

 

	
  Receivable Borrowing Base

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Eligible Inventory shall include only
  inventory owned by Borrower that is located in the United States and in which
  Bank holds a perfected first priority security interest and which is
  comprised of the following:

  	
   

  	
  See footnote

  	
  (1)

  
	
   

  	
   

  	
   

  	
   

  
	
  Finished
  goods in marketable condition

  	
   

  	
  $

  	
                      

  	
   

  
	
  Raw
  materials reasonably necessary to meet Borrower’s production requirements for
  a 12 month period

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Inventory:

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Multiplied
  by 40% eligibility factor

  	
   

  	
  X .40

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Inventory Borrowing Base

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Borrowing Base

  	
   

  	
  $

  	
                      

  	
   

  

 

(1)                                  For
purposes hereof, Eligible Inventory shall be valued at the lower of cost or
market value.

 

	
  II.

  	
  TANGIBLE NET WORTH CALCULATION

  

 

	
  Tangible Net
  Worth

  	
   

  	
  $

  	
                      

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Plus
  Subordinated Debt

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less Floor

  	
   

  	
  $

  	
  (2,000,000

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Tangible Net Worth Calculation

  	
   

  	
  $

  	
                      

  	
   

  

 

11

 

III.                                 COMPLIANCE
STATEMENT

 

I hereby
certify that (i) the information set forth in the Borrowing Base Calculation
and the Tangible Net Worth Calculation is complete and accurate, (ii) I have no
knowledge of any material fact, which would adversely affect the Borrowing Base
Calculation or the Tangible Net Worth Calculation as set forth above, (iii) as
of the date of this Borrowing Base Certificate and Compliance Statement, the
Borrower is in compliance with all representations, warranties and covenants
set forth in the Loan Documents, including without limitation, the Fourth
Amended and Restated Forbearance Agreement.

 

 

	
   

  	
  AMERICAN
  MEDICAL TECHNOLOGIES, INC. 

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

ACKNOWLEDGMENT

 

	
  STATE
  OF                       

  	
  )

  
	
   

  	
  )  ss.

  
	
  COUNTY
  OF                   

  	
  )

  

 

The foregoing
instrument was acknowledged before me on
              
     ,        by
                       , as
                  
of American Medical Technologies, Inc., a Delaware corporation.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
  My
  commission expires:

  	
  My
  commission number is:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [Seal]

  	
   

  
					

 

12

 

EXHIBIT “B”

 

LIST
OF PATENTS RECEIVED, APPLIED FOR OR THAT ARE PENDING

 

 

	
  Item # on
  List

  	
   

  	
  Patent No.

  	
   

  	
  Status

  	
   

  
	
  1

  	
   

  	
  4,521,194

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  4,635,897

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  4,708,534

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  4,733,503

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  4,818,230

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  4,893,440

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  4,940,411

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  5,055,048

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  5,122,060

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  5,123,845

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  5,180,304

  	
   

  	
  Abandoned

  	
   

  
	
  12

  	
   

  	
  5,207,576

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  5,228,852

  	
   

  	
  Abandoned

  	
   

  
	
  14

  	
   

  	
  5,232,367

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  5,257,935

  	
   

  	
   

  	
   

  
	
  16

  	
   

  	
  5,275,561

  	
   

  	
   

  	
   

  
	
  17

  	
   

  	
  5,275,564

  	
   

  	
  Abandoned

  	
   

  
	
  18

  	
   

  	
  5,310,344

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
  5,324,200

  	
   

  	
  Abandoned

  	
   

  
	
  20

  	
   

  	
  5,330,354

  	
   

  	
   

  	
   

  
	
  21

  	
   

  	
  5,334,016

  	
   

  	
   

  	
   

  
	
  22

  	
   

  	
  5,334,019

  	
   

  	
   

  	
   

  
	
  23

  	
   

  	
  5,342,198

  	
   

  	
   

  	
   

  
	
  24

  	
   

  	
  5,350,299

  	
   

  	
   

  	
   

  
	
  25

  	
   

  	
  5,390,204

  	
   

  	
   

  	
   

  
	
  26

  	
   

  	
  5,507,739

  	
   

  	
  Abandoned

  	
   

  

 

13

 

	
  27

  	
   

  	
  5,525,058

  	
   

  	
   

  	
   

  
	
  28

  	
   

  	
  5,621,745

  	
   

  	
   

  	
   

  
	
  29

  	
   

  	
  5,746,596

  	
   

  	
   

  	
   

  
	
  30

  	
   

  	
  5,748,655

  	
   

  	
  Inactive/Client
  Drop

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31

  	
   

  	
  5,752,829

  	
   

  	
   

  	
   

  
	
  32

  	
   

  	
  5,759,031

  	
   

  	
  Abandoned

  	
   

  
	
  33

  	
   

  	
  5,832,013

  	
   

  	
  Inactive/Client
  Drop

  	
   

  
	
  34

  	
   

  	
  6,019,605

  	
   

  	
   

  	
   

  
	
  35

  	
   

  	
  6,075,714

  	
   

  	
   

  	
   

  
	
  36

  	
   

  	
  6,309,216B1

  	
   

  	
   

  	
   

  

 

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]