Project Air: Fourth Amendment Letter

 

 

FOURTH AMENDMENT LETTER

 

To:	Allied Healthcare Holdings Limited Allied Healthcare Group Holdings Limited (formerly Allied Healthcare Group Limited) Stone Business Park Brooms Road Stone Staffordshire ST15 0TL Fax No: 01785 819031
Attention: David Moffatt

10 November 2006

 

Dear Sirs

Project Air:  Fourth Amendment Letter

We refer to the £50,000,000 facility agreement dated 19 July 2004 between Allied Healthcare Group Limited (the “Company”), Allied Healthcare Holdings Limited (the “Borrower”), Allied Healthcare International Inc, the Guarantors listed therein, Barclays Capital and Lloyds TSB Bank PLC as Arrangers and Ancillary Lenders, the Original Lenders listed therein and Barclays Bank PLC as Agent and Security Agent (the “Original Facility Agreement”) as amended by an amendment letter dated 28 July 2006 (the “First Amendment Letter”), an amendment letter dated 11 September 2006 (the “Second Amendment Letter”), and an amendment letter dated 17 October 2006 (the “Third Amendment Letter”). The Original Facility Agreement, the First Amendment Letter, the Second Amendment Letter and the Third Amendment Letter being, together, the “Amended Agreement”.

1

DEFINITIONS

Unless otherwise stated, terms defined in the Amended Agreement have the same meaning in this Letter.

“Fourth Effective Date” means the date on which the Agent notifies the Company that it has received:

(i)

for the Parent and each of the Obligors, either a copy of their respective constitutional documents or a certificate of an authorised signatory of each of them certifying that the constitutional documents previously delivered to the Agent on or before 19 July 2004 for the purposes of the Original Facility Agreement have not been amended and remain in full force and effect;

(ii)

a copy of a resolution of the board of directors of the Parent and each Obligor:

(a)

approving the terms of, and the transactions contemplated by, this Letter and resolving that it execute this Letter; and

(b)

authorising a specified person or persons to execute this Letter on its behalf;

 

 

 

 

(iii)

a specimen of the signature of each person authorised by the resolution referred to in paragraph (ii) above;

(iv)

a certificate of the Company (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Facility A Commitment and the Facility B Commitment under the Amended Agreement would not cause any borrowing, guaranteeing or similar limit binding on the Parent or any Obligor to be exceeded; and

(v)

a certificate of an authorised signatory of the Parent and the relevant Obligor certifying that each copy document listed at (i) to (iv) above is correct, complete and in full force and effect as at a date no earlier than the date of this Letter.

2

OVERDRAFT

2.1

The Bank agrees, subject to the terms and conditions of this Letter, to continue to make the Overdraft Facility available to the Borrower from the Fourth Effective Date. The Overdraft Facility shall also continue to be made available on an uncommitted basis and may be cancelled by the Bank at any time by notice to the Borrower.

2.2

The Overdraft Facility will be available for utilisation by way of overdraft on the current account of the Borrower held with the Bank.

2.3

The total utilisations in respect of the Overdraft Facility at any time shall not exceed  £3,000,000. The Bank may refuse any utilisation request that would result in this limit being exceeded.

2.4

The Overdraft Facility shall be repayable by the Borrower on an “on demand basis”, that is to say that the Bank may at any time and without giving any reason therefore demand immediate repayment of all or any part the Overdraft Facility or may by notice immediately cancel any part of the Overdraft Facility, whereupon it shall be immediately due and payable to the Bank.

2.5

The Borrower shall apply all amounts borrowed under the Overdraft Facility for its general corporate purposes.

2.6

To the extent that no demand is made in respect of the Overdraft Facility on or prior to 12 December 2006, the Borrower shall ensure that all amounts outstanding in respect of the Overdraft Facility are reduced to zero, and the Overdraft Facility shall be automatically cancelled, on 12 December 2006.

2.7

Interest on the Overdraft Facility shall be charged at the same rate as is applicable to Facility B under the Amended Agreement and shall be computed on a 365 day basis and shall be payable on demand, or if no such demand is made on or prior to 12 December 2006, on 12 December 2006.

2.8

The provisions of Clause 13 of the Amended Agreement shall be incorporated into this Letter as if set out in full and shall apply in respect of the Overdraft Facility.

2.9

If the Bank does allow any utilisation resulting in the facility limit being exceeded in respect of the Overdraft Facility, it will not mean that such limit has changed or that the Bank will agree to any other utilisation which would have the effect of exceeding the limit and the right of the Bank to charge an unauthorised excess margin and / or unauthorised excess fee pursuant to Clause 2.10 below does not constitute an agreement by the Bank to permit borrowings in excess of any limit applicable to the Overdraft Facility.

 

 

 

 

2.10

To the extent that at any time the aggregate total utilisations under the Overdraft Facility exceed £3,000,000 without the prior written consent of the Bank (each such instance an “Excess”), the Bank shall be entitled to charge the Borrower:

2.10.1

a fee in the amount of £10,000 for each instance of such an Excess arising; and

2.10.2

interest on the entire amount outstanding under the Overdraft Facility at the time of Excess calculated at a rate of 15% per annum above the Bank’s base rate from time to time, such default rate of interest to remain applicable until any relevant Excess has been repaid and the total utilisation under the Overdraft Facility have been reduced to below £3,000,000. Any interest payable pursuant to this Clause 2.10.2 shall be computed on a 365 day basis and shall be payable on demand, or if no such demand is made on or prior to 12 December 2006, on 12 December 2006.

2.11

The Obligors hereby confirm that the Security granted in favour of the Security Agent pursuant to the Security Documents is granted as continuing security for present and future moneys, debts and liabilities due, owing or incurred by the Borrower under or in connection with any Finance Document, including by virtue of the designation of this Letter as a Finance Document, any present and future moneys, debts and liabilities due, owing or incurred by the Borrower under or in connection with the Overdraft Facility.

3

COVENANTS

3.1

Resetting of Financial Covenants

The Lenders and the Company hereby undertake to use all reasonable endeavours to agree, on or prior to 12 December 2006, a revised Clause 21 of the Amended Agreement, such revised Clause 21 to be in form and substance satisfactory to the Lenders.

3.2

Acquisition Covenant

Notwithstanding the provisions of Clause 22.11 of the Amended Agreement, the Parent and each Obligor undertakes that it will not (and the Company undertakes that it will ensure that no other member of the Group will), on or prior to 12 December 2006:

3.2.1

invest in or acquire any share in, or any security issued by, any person, or any interest therein or in the capital of any person, or make any capital contribution to any person (or agree to do any of the foregoing); or