MAY 14, 1997 WAIVER AND AGREEMENT
Reference is hereby made to that certain Amended and Restated Credit
Facilities Agreement dated as of October 13, 1995 by and among Allied Healthcare
Products, Inc., a Delaware corporation ("Allied"), Life Support Products, Inc.,
a California corporation ("LSP"), B&F Medical Products, Inc., a Delaware
corporation, ("B&F"), Hospital Systems, Inc., a California corporation ("HSI"),
Bear Medical Systems, Inc., a California corporation ("BMS") and BiCore
Monitoring Systems, Inc., a California corporation ("BiCore") (Allied, LSP, B&F,
HSI, BMS and BiCore are hereinafter referred to individually and collectively as
"Borrower"), The Boatmen's National Bank of St. Louis, ("Boatmen's"),
individually and as Agent under the Loan Agreement, and the other lenders listed
on the signature pages thereof ("Lender") (as the same has been amended or
modified prior to the date hereof, the "Loan Agreement"). Capitalized terms used
and not otherwise defined herein shall have the meanings given thereto in the
Loan Agreement.
Borrower has notified Lenders that Borrower is not in compliance with
certain of the covenants contained in Section 17 of the Loan Agreement with
respect to the fiscal period ending March 31, 1997 (the "Affected Period"). Such
non-compliance constitutes an Event of Default under the Loan Agreement.
Borrower has requested that Lenders waive all Events of Default in connection
with the covenants contained in Section 17 with respect to the Affected Period.
Upon the terms and conditions contained herein, Lenders are willing to
waive such Events of Default for a limited period of time, as set forth herein,
and in consideration of the foregoing, and for other good and valuable
consideration, the Borrower, the Agent and the undersigned Lenders hereby agree
as follows:
1. WAIVER. Borrower hereby represents that it is in non-compliance with the
covenants contained in 17.5, 17.7, 17.8, and 17.10 of the Loan Agreement with
respect to the Affected Period. Subject to satisfaction of the conditions set
forth herein, Lenders hereby agree to waive all Events of Default in connection
with Borrower's non-compliance with the covenants contained in 17.5, 17.7, 17.8,
and 17.10 of the Loan Agreement with respect to the Affected Period. Lenders
further agree to waive the Event of Default occurring pursuant to Section 18.1.9
(vi) of the Loan Agreement as a result of Borrower's corporate resolutions
authorizing the filing of a petition in bankruptcy, such resolutions having been
enacted on or about May 14, 1997. Borrower hereby represents to Lenders that
such resolutions have been rescinded.
2. WAIVER CHARGES. In consideration for and as a condition precedent to
this Agreement, Borrower hereby agrees that it shall pay to Agent for the
ratable benefit of Lenders, "Waiver Charges" as follows:
2.1 UPFRONT CHARGE. On May 14, 1997, June 14, 1997 (if the Loan
Obligations have not been repaid in full by such date), and July 14, 1997 (if
the Loan Obligations have not been repaid in full by such date), Borrower shall
pay in cash on each of those days an additional Waiver Charge in the amount of
$50,000.00; and
2.2. WAIVER CHARGES. On May 14, 1997, Borrower shall accrue an additional
Waiver Charge to the Lenders in the amount of $300,000.00, which Waiver Charge
shall be payable in cash on the Revolver Maturity Date. Commencing August 15,
1997 (if the Loan Obligations have not been repaid in full by such date), and
from time to time thereafter, the Agent upon written notice to Borrower may
require and cause Allied to issue an amount, calculated as set forth below, of
shares (in such name, number of certificates and shares per certificate as the
Agent may from time to time specify, including future substitutions and
exchanges as may be requested by the Agent to Allied) of the common stock of
Allied in exchange for all or a portion of said Waiver Charge. Allied agrees to
file a registration statement with respect to the transfer of such shares as
soon as practicable following such issuance and agrees to use its best efforts
to cause such registration statement to be declared effective as soon as
practicable, but in any event within 90 days thereof. The amount of shares to be
issued from time to time shall be as follows: the percentage of the Waiver
Charge subject to the requested exchange specified in the Agent's notice
multiplied by 90,000 shares. Each Lender, upon written notice to Agent, may
require the Agent to deliver the notice hereunder and to require the exchange of
said Lender's then share amount, or any portion thereof, in the Waiver Charge in
the same percentage as said Lender's then percentage share of the Loan
Obligations.
3. SPECIFIC WAIVER. The waiver made hereby is specific in intent and is valid
only for the specific purpose for which given. Except as specifically set forth
herein, the execution, delivery and effectiveness of this Agreement shall not
operate as a waiver of any right, power or remedy of Agent and Lenders under any
of the Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents. Nothing contained herein shall obligate Agent and/or Lenders to
give additional waivers of any provisions of any of the Loan Documents,
including but not limited to Section 17 of the Loan Agreement.
4. AMENDMENTS TO LOAN AGREEMENT.
4.1 Section 20.4.1 of the Loan Agreement is amended by deleting the phrase
"to one or more banks or financial institutions." Section 20.4.1.1 of the Loan
Agreement is amended by deleting its provisions and inserting the following:
"Agent shall have accepted the assignment, which acceptance
shall not be unreasonably withheld."
4.2 Section 15.19 of the Loan Agreement is amended by adding the
following:
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"In particular, Borrower promptly upon request shall
provide, and shall direct Borrower's advisors and
consultants to provide, to the Agent for the benefit of the
Lenders such information that the Agent may request from
Borrower with respect to Borrower's efforts to (i) sell the
Borrower or any of its subsidiaries, divisions, or lines of
business; or (ii) refinance all or part of the Indebtedness
to the Lenders. Additionally, Borrower within ten days from
the date hereof shall retain and thereafter cause the
Corporate Finance, Recovery and Dispute Group of Price
Waterhouse LLP to provide to the Agent such information that
the Agent may require pursuant to Section 15.19, including
but not limited to, information and analysis regarding
Borrower's proposals for a possible longer term refinancing,
restructuring or other repayment of the Loan Obligations,
subject to the requirements of the Loan Agreement, including
any and all necessary approvals, consents and agreements of
the Agent and the Lenders. Price Waterhouse and said Group
are hereby authorized and directed by the Borrower to
provide such information to the Agent for the benefit of the
Lenders. Any requests by the Agent hereunder for information
from Price Waterhouse or said Group may not thereafter be
withdrawn, absent the approval of the Supermajority Lenders.
All fees and expenses payable to Price Waterhouse and said
Group shall be the sole responsibility of the Borrower. The
Agent and the Lenders shall have no liability or obligation
with respect to any of Price Waterhouse's or said Group's
fees and expenses.
4.3 For the period ending August 15, 1997, Section 16.2.1 of the Loan
Agreement is amended by deleting "90" and inserting "135."
5. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby represents and
warrants to Lenders that (i) this Agreement has been duly authorized by
Borrower's Board of Directors, (ii) no consents are necessary from any third
parties for Borrower's execution, delivery or performance of this Agreement,
(iii) this Agreement constitutes the legal, valid and binding obligation of
Borrower enforceable against Borrower in accordance with its terms except as the
enforcement thereof may be limited by bankruptcy, insolvency or other laws
related to creditors rights generally or by the application of equity
principles, (iv) to the best of Borrower's knowledge, after due inquiry, except
as disclosed on the disclosure schedule attached hereto as Exhibit 13, all of
the representations and warranties contained in Section 13 of the Loan
Agreement, as amended by this Agreement, are true
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and correct in all material respects with the same force and effect as if made
on and as of the effective date of this Agreement, except that with respect to
the representations and warranties made regarding financial data in Section
13.15, such representations and warranties are hereby made with respect to the
most recent Financial Statements and other financial data (in the form required
by the Loan Agreement) delivered by Borrower to Lenders, (v) to the best of
Borrower's knowledge, after due inquiry, there is no Default which is continuing
and no Event of Default has occurred under the Loan Agreement as amended by this
Agreement, and (vi) the Loan Agreement (as modified by this Agreement)
represents the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except to the extent that the
enforceability thereof against Borrower may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforceability of creditor's rights generally or by equitable
principles of general application (whether considered in an action at law or in
equity). 6. REAFFIRMATION. Borrower hereby acknowledges and confirms that (i)
except as expressly amended hereby the Loan Agreement remains in full force and
effect, (ii) Borrower has no defenses to its obligation under the Loan Agreement
and the other Loan Documents, (iii) the Security Interests of Agent and Lenders
under the Security Documents secure all the Loan Obligations under the Loan
Agreement as amended by this Agreement, continue in full force and effect and
have the same priority as before this Agreement, and (iv) Borrower has no claim
against Agent or any Lender arising from or in connection with the Loan
Agreement or the other Loan Documents. To the extent Borrower may have any
claims against Agent or any Lender arising from or in connection with the Loan
Agreement, the other Loan Documents or any act or failure to act on the part of
Agent or any Lender prior to the date of this Agreement, Borrower hereby waives
and releases the Agent and the Lenders, including any of their officers,
directors, agents, advisors, attorneys or representatives, from any and all
claims, debts, damages, demands, liabilities, obligations and suits, of whatever
kind or nature, and any damages, liabilities, losses, costs or expenses incurred
by Borrower and any of its affiliates in connection therewith.
7. GOVERNING LAW. This Agreement has been executed and delivered in St.
Louis, Missouri, and shall be governed by and construed under the laws of the
State of Missouri without giving effect to choice or conflicts of law
principles thereunder.
8. SECTION TITLES. The section titles in this Agreement are for
convenience of reference only and shall not be construed so as to modify any
provisions of this Agreement.
9. COUNTERPARTS; FACSIMILE TRANSMISSIONS. This Agreement may be executed in one
or more counterparts and on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. A counterpart of this Agreement or a signature page of this
Agreement transmitted by facsimile machine or telecopier and showing a signature
shall have the same binding effect
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as an original bearing an original signature. No party may raise the use of
a facsimile machine or telecopier or the fact that any signature was
transmitted through the use of a facsimile or telecopier machine as a defense
to the enforcement of this Agreement.
10. INCORPORATION BY REFERENCE. Lenders and Borrower hereby agree that all
of the terms of the Loan Documents are incorporated in and made a part of
this Agreement by this reference.
11. STATUTORY NOTICE. The following notice is given pursuant to Section
432.045 of the Missouri Revised Statutes; nothing contained in such notice
will be deemed to limit or modify the terms of the Loan Documents or this
Agreement:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND
OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU BORROWER(S)) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS
WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS
THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
BORROWER AND LENDERS HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL CREDIT
AGREEMENT BETWEEN BORROWER AND LENDERS WITH RESPECT TO THE SUBJECT MATTER OF
THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be dully
executed by appropriate duly authorized officers as of May 14, 1997.
ALLIED HEALTHCARE PRODUCTS, INC. LIFE SUPPORT PRODUCTS, INC.
/s/ Barry F. Baker /s/ Barry F. Baker
By: ______________________________ By: ______________________________
Name: Barry F. Baker Name: Barry F. Baker
Title: VP Finance and CFO Title: VP Finance and CFO
B&F MEDICAL PRODUCTS, INC. HOSPITAL SYSTEMS, INC.
/s/ Barry F. Baker /s/ Barry F. Baker
By: ______________________________ By: ______________________________
Name: Barry F. Baker Name: Barry F. Baker
Title: VP Finance and CFO Title: VP Finance and CFO
BEAR MEDICAL SYSTEMS, INC. BICORE MONITORING SYSTEMS, INC.
/s/ Barry F. Baker /s/ Barry F. Baker
By: ______________________________ By: ______________________________
Name: Barry F. Baker Name: Barry F. Baker
Title: VP Finance and CFO Title: VP Finance and CFO
THE BOATMEN'S NATIONAL BANK OF ST. DRESDNER BANK A.G. NEW YORK AND
LOUIS GRAND CAYMAN BRANCHES
/s/ Robert W. Patton /s/ Thomas J. Nadramia
By: ______________________________ By: ______________________________
Name: Robert W. Patton Name: Thomas J. Nadramia
Title: Vice President Title: Vice President
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FIRST BANK LASALLE NATIONAL BANK
/s/ Brenda J. Laux /s/ David Klapp
By: ______________________________ By: ______________________________
Name: Brenda J. Laux Name: David Klapp
Title: Senior Vice President Title: Vice President
THE SUMITOMO BANK, LIMITED CREDITANSTALT CORPORATE FINANCE, INC.
/s/ Christina T. Schoen
By: ______________________________ By: ______________________________
Name: ___________________________ Name: Christina T. Schoen
Title: ____________________________ Title: Vice President
/s/ Arthur W. Seidel
By: ______________________________ By: ______________________________
Name: ___________________________ Name: Arthur W. Seidel
Title: ____________________________ Title: Vice President
MERCANTILE BANK NATIONAL ASSOCIATION PNC BANK, NATIONAL ASSOCIATION
/s/ Louis Hermann
By: ______________________________ By: ______________________________
Name: Louis Hermann Name: ___________________________
Title: Vice President Title: ____________________________
SANWA BUSINESS CREDIT CORPORATION
/s/ Frank Sierdevich
By: ______________________________
Name: Frank Sierdevich
Title: Vice President
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EXHIBIT 13
ADDITIONS TO EXHIBIT 13 OF THE LOAN AGREEMENT
None, if nothing listed below.
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