Exhibit 10(u)
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND COLLATERAL DOCUMENTATION
This Agreement, entered as of the 1st day of December, 1997, by and
between NATIONAL BANK OF CANADA, a chartered bank constituted under the Bank
Act of Canada, with offices at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Bank" or "Lender"), MEDIVATORS, INC., a Minnesota corporation with offices
at 0000 Xxxx Xxx Xxxxxx, Xxxxx, Xxxxxxxxx 00000 ("MediVators") and DISPOSAL
SCIENCES, INC., a Minnesota corporation, with offices at 0000 Xxxx Xxx
Xxxxxx, Xxxxx, Xxxxxxxxx 00000 ("Disposal").
RECITALS:
1. Borrowers are the "Borrowers" under a Loan and Security Agreement
dated May 22, 1996 with National Canada Finance Corp. ("NCFC"). The Loan and
Security Agreement, as heretofore amended, is herein referred to as the "Loan
Agreement". Lender is the successor in interest to NCFC under the Loan
Agreement. Any capitalized terms utilized and not defined herein shall have
the same meanings as are ascribed to them in the Loan Agreement.
2. The Borrowers have requested, and Lender has agreed to, the
modification of certain terms of the Loan Documents in the manner herein
provided.
Now therefore, in consideration of the foregoing, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
Section 1. Modification of Loan Agreement and Loan Documents.
1.1 Loan Agreement Amendments. The Loan Agreement is hereby amended as
follows:
(a) Section 1.1 and the Preamble are hereby amended by substituting
the following defined term for the existing defined term:
"Lender" means National Bank of Canada, a chartered bank constituted
under the Bank Act of Canada, and any successor or assignee thereto hereunder.
(b) Sections 2.1, 2.2 and 2.6 are amended to decrease for all
purposes the limit on Advances under the Revolving Line of Credit Loan from
$2,000,000 to $1,500,000.
(c) Articles 6, 7 and 8 are modified to approve Borrowers having
entered into the lease referenced at Exhibit D, #5 and to allow either
Borrower to enter up to three further lease agreements with a maximum
expenditure of $50,000 each.
(d) Section 7.13 is modified by deleting same and substituting the
following in its place and stead:
Section 7.13 Capital Expenditures. Borrower will not make
capital expenditures or payments in the nature of capital
expenditures in any fiscal year in the aggregate in excess of
$275,000 for the fiscal year ended July 31, 1997 and $300,000 for
the fiscal year ending July 31, 1998 (inclusive of expenditures for
research and development molds and tooling
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recorded as other assets and exclusive of fixed assets purchased
under the capital lease authorized under subparagraph (c) above).
(e) Exhibit H is modified by substituting therefor Exhibit H
annexed hereto.
(g) Any reference to National Canada Finance Corp. in any Loan
Document is hereby deemed amended by substituting National Bank of Canada for
National Canada Finance Corp.
1.2 Affirmation. Except as modified herein, the Loan Agreement and Loan
Documents shall remain in full force and effect.
Section 2. Waiver of Defaults.
2.1 Waiver of Past Defaults. Nothing contained herein and no action by
Lender shall be deemed to constitute a waiver of any Default under the Loan
Documents.
Section 3. Borrower Representations.
3.1 Corporate Authority. Borrowers have the authority to enter into and
perform their obligations under this Agreement. The execution, delivery and
performance of this Agreement has been duly authorized by all requisite
corporate action of Borrowers. Each of the Borrower's Locations, the current
locations of all Inventory, and the locations of each office at which each
Borrower maintains Records concerning its Accounts Receivable or other
Accounts and General Intangibles, and other financial matters, are solely as
set forth on Exhibit E annexed hereto.
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3.2 Enforceability. This Agreement constitutes the legal valid and
binding obligations of Borrowers and is enforceable against Borrowers in
accordance with its terms.
3.3 No Conflict. The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby by each Borrower do not
conflict with or result in any violation of each Borrower's Certificate of
Incorporation or by-laws or any statute, rule or regulation applicable to or
binding upon either Borrower. The execution, delivery and performance of this
Agreement will not conflict with or result in any violation of any provision
of any agreement, contract, instrument, order, writ, judgment, decree or
other undertaking to which any Borrower is a party or is obligated or by
which any Borrower's property is bound.
3.4 Authorization. The signatories executing this Agreement on behalf
of Borrowers have been authorized by Borrowers to so execute this Agreement
and the execution of this Agreement has been authorized by corporate
resolution of each Borrower.
3.5 Loan Agreement Representations. Borrowers hereby reaffirm all of
their representations and warranties set forth in Article 8 of the Loan
Agreement as of the date hereof, as modified with the substitution of
Exhibits C, D and E annexed hereto for such Exhibits annexed to the Loan
Agreement.
Section 4. General Provisions.
4.1 Reaffirmation of Indebtedness. Borrowers hereby acknowledge
principal indebtedness (plus interest accrued thereon) due to Bank as follows:
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Loan Principal Date
---- --------- ----
Revolving Line of $350,524.84 11/30/97
Credit Loan
Borrowers represent and warrant to Bank that they have no counterclaim,
defenses of offsets to any of its obligations under the Loan Agreement and
Loan Documents. Borrowers acknowledge that Bank has not by virtue of this
Agreement waived any right or remedy which it may possess by virtue of any
actions or defaults of Borrowers in conjunction with their obligations under
the Loan Documents.
4.2 Documents. By execution of this Agreement, Borrowers are
simultaneously modifying all Loan Documents, including any promissory notes
previously delivered by Borrowers, to conform to the terms of this Agreement,
and all of such Loan Documents shall be deemed so modified. The Loan
Documents shall otherwise remain in full force and effect.
4.3 Entire Agreement. This Agreement and the Loan Documents and the
instruments, agreements and certificates delivered simultaneously herewith,
if any, or referred to herein, constitute the entire agreement of the parties
with respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements, whether written or oral, except as otherwise
provided herein.
4.4 Amendment. No provision of this Agreement may be waived or changed
orally, but only by instrument in writing, signed by the party against whom
enforcement of such change or waiver is sought.
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4.5 Notices. All notices and other communications hereunder shall be
in writing and shall be effective when delivered personally or when mailed by
certified or registered mail (return receipt requested) addressed a the
addresses set forth hereinabove or to such other addresses as a party may
designate to the other in writing.
4.6 Effective Date. This Agreement and the amendments provided for
herein shall take effect as of the date provided for herein or otherwise as
of the date of this Agreement set forth hereinabove.
4.7 Unenforceability. Any provision of this Agreement which is
prohibited or unenforceable shall be deemed severed from this Agreement
without invalidating the remaining provisions or affecting the validity or
enforceability of the remainder of this Agreement.
4.8 Counterpart Execution. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures thereto were upon
the same instrument.
4.9 Headings. The Section headings contained herein are for convenience
of reference only and are not intended to define, limit or describe the scope
or intent of any provision of this Agreement.
4.10 Third Parties. None of the obligations hereunder of any party
shall inure to or be enforceable by any party other than a party of this
Agreement.
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4.11 Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of, the successors in interest and the permitted assigns
of the parties hereto.
4.12 Default. Except as expressly set forth herein, Bank hereby
specifically reserves all of its rights and remedies under the Loan Agreement
and Loan Documents. If any Borrower fails to perform its obligations under
this Agreement, Borrowers shall be in default hereunder and said default
shall be a default under the Loan Documents.
4.13 Other Documents. Bank and Borrowers agree to execute any and all
other documents and to take such other actions as may be necessary to carry
out the terms of this Agreement. All other documents shall be in a form and
content acceptable to Bank.
4.14. Release and Covenant Not to Xxx. Each Borrower for itself, its
partners, officers and directors, affiliates, successors and assigns, and all
others claiming by or through them, hereby covenant that they will not bring,
commence, prosecute or maintain any suit, action or proceeding, either at law
or in equity, in any court of the United States or of any State thereof,
arising up to the date of this Agreement under or by virtue of the Loan
Documents or with respect to the Loans in any manner or arising out of any
negotiations or communications entertained in connection with this Agreement.
Each Borrower, for itself, its partners, officers and directors, affiliates,
successors and assigns, and all other claiming by or through it, hereby fully
and forever release and discharge Bank, its officers, directors, agents
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and employees, affiliates, predecessors in interest, successors and assigns,
from any and all causes of action, whether sounding in contract or in tort,
or otherwise, and any and all liability, accrued or unaccrued, known or
unknown, fixed or contingent, on account of any and all claims, demands, and
causes of action for all losses, damages, expenses or liabilities to
Borrowers, their partners, officers and directors, affiliates, successors and
assigns, and all other claiming by or through them, arising up to the date of
this Agreement out of the Loan Documents or with respect to the Loans in any
manner or arising out of any negotiations or communications entertained in
connection with this Agreement. The parties acknowledge and agree that each
Borrower's release and covenant not to xxx contained in this Section 4.14
does not apply to claims, actions and causes of action arising after the date
of this Agreement.
4.15 Waiver of Trial by Jury. EACH BORROWER HEREBY, KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY, WAIVES ANY RIGHT SUCH BORROWER MAY HAVE OR HEREAFTER
ACQUIRE TO A TRIAL BY JURY IN RESPECT TO ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT. Each Borrower hereby certifies
that neither Bank nor any of its representatives, agents or counsel has
represented, expressly or otherwise, that Bank would not, in the event of any
such suit, action or proceeding seek to enforce this waiver of right to trial
by jury. Each Borrower acknowledges that it has made this waiver knowingly,
voluntarily and intentionally.
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed, all as of the date and year first above written.
ATTEST: MEDIVATORS, INC.
/s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxx Xxxxxx
------------------------------ --------------------------------
Xxxxxxxx X. Xxxxxxxxx Xxx Xxxxxx
Vice President and Controller President and CEO
ATTEST: DISPOSAL SCIENCES, INC.
/s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxx Xxxxxx
------------------------------ --------------------------------
Xxxxxxxx X. Xxxxxxxxx Xxx Xxxxxx
Vice President and Controller President and CEO
ATTEST: NATIONAL BANK OF CANADA
By: /s/ Xxxx X. Xxxxxx
------------------------------ --------------------------------
Xxxx X. Xxxxxx
Vice President
Attachments:
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Substituted Xxxxxxxx X, X, X xxx X
0
XXXXXXX X
Time Period/Test Date
---------------------
Net Income (excluding intercompany
administrative charges) not less than:
4th quarter of fiscal year ended July 31, 1997............. $ (75,000)
Fiscal year ended July 31, 1997............................ 105,000
1st quarter of fiscal year ending July 31, 1998 ........... 50,000
1st six months of fiscal year ending July 31, 1998......... 160,000
1st nine months of fiscal year ending July 31, 1998........ 395,000
Fiscal year ending July 31, 1998........................... 675,000
Tangible Net Worth not less than:
July 31, 1997.............................................. $2,000,000
October 31, 1997........................................... 2,050,000
January 31, 1998........................................... 2,160,000
April 30, 1998............................................. 2,395,000
July 31, 1998.............................................. 2,675,000
Leverage Ratio not more than:
July 31, 1997.............................................. 0.8
October 31, 1997........................................... 0.7
January 31, 1998........................................... 0.7
April 30, 1998............................................. 0.6
July 31, 1998.............................................. 0.6
