EXHIBIT 10.28
September 1, 1999
Tom Jenuleson
Chief Financial Officer and
Vice President
Allied Healthcare Products, Inc.
1720 Sublette Avenue
St. Louis, MO 63110
Re: LETTER OF SECOND AMENDMENT ("SECOND AMENDMENT") TO THE $5,000,000
PROMISSORY NOTE DATED AUGUST 7, 1998 ("NOTE") MADE BY ALLIED
HEALTHCARE PRODUCTS, INC. ("COMPANY") TO THE ORDER OF LASALLE BANK
NATIONAL ASSOCIATION ("BANK")
Dear Mr. Jenuleson:
Reference is made to the above Note. All capitalized terms used and not
otherwise defined herein shall have the meanings given them in the Note.
Pursuant to provisions of the Note, the Company is limited in its ability
to sell, lease, assign, transfer or otherwise dispose of its properties or
assets. The Note additionally requires that the Company maintain a Tangible Net
Worth at all times of not less than $21,000,000. In that certain First
Amendment letter dated March 24, 1999 by and between the Company and the Bank
(the "First Amendment"), the parties agreed to waive said requirement from March
24, 1999 through and including June 30, 1999 provided the Company's Tangible Net
Worth during such period not be less than $20,000,000. The First Amendment
further provided that after June 30, 1999 the requirement that the Company's
Tangible Net Worth would not be less than $21,000,000 was reinstituted.
Subject to the terms herein provided, this will serve as the Bank's consent
and agreement to the following:
3. The terms of Page 7, paragraph (n) of the Note requiring that the
Company's Tangible Net Worth at all times not be less than $21,000,000
are hereby waived from this date provided the Company's Tangible Net
worth at the close of each fiscal quarter beginning June 30, 1999 must
not be less than the sum of (i) $17,500,000 plus (ii) fifty percent
(50%) of the Net Income (exclusive of any losses) reflected in each
audited income statement for each fiscal year beginning June 30, 1999.
For the purposes of this paragraph, the "Net Income" shall mean, for
any Period of calculation, the Company's net income as determined in
accordance with GAAP but excluding any extraordinary gains and losses,
net of taxes.
Except as expressly stated herein, the Loan Documents, as hereby amended,
shall remain in full force and effect and are hereby ratified and confirmed in
all respects. The execution, delivery and effectiveness of this letter
agreement shall not operate as a waiver of any right, power or remedy of the
Bank under any of the Loan Documents nor constitute a waiver of any provision of
the Loan Documents as except as specifically set forth herein. The Company
hereby ratifies, reaffirms, acknowledges and agrees that the Loan Documents, as
hereby amended, are and shall continue to be the valid and enforceable
obligations of the Company.
If the foregoing meets with your approval and acceptance, please indicate
your agreement where indicated below.
LASALLE NATIONAL BANK
By:
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Robert S. Holmes,
Senior Vice President
The undersigned Allied Healthcare Products, Inc. hereby agrees and accepts
the terms of the above letter as of the date first above written.
ALLIED HEALTHCARE PRODUCTS, INC.
By:
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Tom Jenuleson,
Chief Financial Officer and Vice President