EXHIBIT 4.7 AMENDMENT TO LINE OF CREDIT AGREEMENT BETWEEN BANK ONE AND AMERICAN
MEDICAL TECHNOLOGIES, INC. DATED MARCH 23, 2001
March 20, 2001
Xx. Xxxxxx Xxxxxx
Chief Financial Officer
American Medical Technologies, Inc.
0000 Xxxx Xxxx
Xxxxxx Xxxxxxx, Xxxxx 00000
Re: Amendment to the Revolving Business Credit Note (LIBOR - Based Interest
Rate) (the "Note") and Line of Credit Agreement, (the "Agreement") both dated
September 21, 2000
Dear Xxxxxx:
This letter, when executed by American Medical Technologies, Inc. and returned
to Bank One, Michigan will amend the following sections of the above referenced
documents.
The Note is amended by restating the definition of "Applicable Margin" as
follows:
"Applicable Margin" means, with respect to any Floating Rate Loan, 0%
per annum and, with respect to any Eurodollar Loan, 2.5% per annum until the
Cash Flow Coverage Ratio, as defined in the Credit Agreement is not less than
2.00:1.00 for the fiscal quarter immediately preceding calculation, and,
thereafter, 1.5% per annum.
The Agreement is amended as follows:
Section 5.7 is amended by adding the following:
C. Within 30 days after and as of the end of each calendar month, the
following lists, each certified as correct by one of its authorized agents:
(1) a list of accounts receivable, aged from date of invoice;
(2) a list of inventory, valued at the lower of cost or
market;
(3) a borrowing base certificate in form and substance
satisfactory to the Bank calculating the Borrowing Base in
accordance with paragraph 16 as of the last day of such month.
Section 6.3 (H) is amended by replacing $7,500,000.00 with $9,000,000.00.
Section 6.3 (J) is replaced in its entirety as follows:
Cash Flow Coverage Ratio. Permit the ratio of the Borrower's EBITDA to its Debt
Service to be less than 2.00 to 1.00 calculated as of March 31, 2001, for fiscal
quarter then ending, as of June 31, 2001 for the six months then ending, and as
of September 30, 2001 for the nine months then ending, and as of December 31,
2001, and for each quarter thereafter, for the four quarter period ending on the
last day of the fiscal quarter immediately preceding the date of calculation.
The following is added as Section 16:
Borrowing Base. Notwithstanding any other provision of this Agreement, the
aggregate principal amount outstanding at any one time under Facility A shall
not exceed the lesser of the Borrowing Base or $7,500,000.00. In the event the
outstandings exceed such amount, Borrower shall immediately prepay the
outstandings under Facility A in an amount not less than such excess. Borrowing
Base means:
A. 80% of the Borrower's trade accounts receivable in which the Bank has a
perfected, first priority security interest, excluding accounts more than 90
days past due from the date of invoice, accounts subject to offset or defense,
government, bonded, affiliate and foreign accounts not covered by trade credit
insurance acceptable to the Bank, accounts from trade debtors of which more than
50% of the aggregate amount owing from the trade debtor to the Borrower is more
than 90 days past due, and accounts otherwise unacceptable to the Bank, plus,
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B. Inventory of the Borrower in which the Bank has a perfected first
priority security interest, valued at the lower of cost or market but not
exceeding $3,500,000.00 in the aggregate, as follows:
(1) 50% of raw material inventory; and
(2) 50% of finished goods inventory, plus,
C. Prior to June 1, 2001, 50% of the net book value of the Borrower's
machinery and equipment in which the Bank has a perfected, first priority
security interest, plus
D. Prior to June 1, 2001, 100% of the gross book value of the Borrower's
real property located at 0000 Xxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxx in which the Bank
has a perfected, first priority security interest. The Borrower shall deliver to
the Bank an executed mortgage, ALTA mortgage title insurance policy without
exceptions, mortgage survey certified to the Bank, Phase I environmental survey
and other environmental documentation required by the Bank and, where
applicable, an assignment of rents, subordinations of leases, and/or collateral
assignments of land contracts, all in form and substance satisfactory to the
Bank.
E. On June 1, 2001, and thereafter, 85% of the appraised value as
established by an independent third party appraiser of recognized standing hired
by the Bank, of the Borrower's real property located at 0000 Xxxx Xxxx, Xxxxxx
Xxxxxxx, Xxxxx.
No other term of condition of any Loan Document is changed by this amendment.
Please indicate your acceptance of these changes by having the appropriate
corporate officer sign this letter below and return it to my attention at the
address above.
With best regards,
/s/ Xxx Xxxxxxxxxx
---------------------------
Xxx Xxxxxxxxxx
Vice President
Accepted and agreed this 23rd day of March, 2001.
By: American Medical Technologies, Inc.
By: /s/ Xxx X. Xxxxxxx Its: Chariman & CEO
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