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Exhibit 10.12
$12,000,000
TERM LOAN
AND
$6,500,000
REVOLVING LOAN
PROVIDED BY
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
TO
YOUNG INNOVATIONS, INC.,
YOUNG DENTAL MANUFACTURING COMPANY,
LORVIC HOLDINGS, INC.,
THE LORVIC CORPORATION
AND
DENTICATOR INTERNATIONAL, INC.
JULY 22, 1996
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LOAN AGREEMENT
In consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, Young Innovations,
Inc., a Missouri corporation ("Innovations"), Young Dental Manufacturing
Company, a Missouri corporation ("Dental"), Lorvic Holdings, Inc., a Delaware
corporation ("Holdings"), The Lorvic Corporation, a Delaware corporation
("Lorvic") and Denticator International, Inc., a Missouri corporation
("Denticator") and The Boatmen's National Bank of St. Louis ("Lender"), agree
as follows:
1 GENERAL.
1.1 EFFECTIVE DATE. This Agreement shall become effective on July 22,
1996 (the "Effective Date").
1.2 DEFINED TERMS. Each capitalized term in this Agreement shall have
the meaning defined in the Glossary which is attached hereto as Appendix 1.2. If
a capitalized term is not defined in the Glossary, it shall have the meaning
defined elsewhere in this Agreement. If a capitalized term is not defined in
either the Glossary or elsewhere in this Agreement, it shall have the meaning
defined in the UCC.
1.3 SINGULAR AND PLURAL FORMS. All definitions shall be equally
applicable to both the singular and the plural forms of the terms defined.
1.4 REFERENCES. The words "hereof", "herein", "hereby", "hereunder",
and words of similar import refer to this Agreement as a whole and not to any
particular provision of this Agreement. The word "Section" or "section" and
"Page" or "page" refer to a section or page, respectively, of this Agreement
unless it expressly refers to something else.
1.5 REFERENCES TO BORROWER. The term "Borrower" herein refers to
Innovations, Dental, Holdings, Lorvic and Denticator both separately and
collectively. The words "a Borrower", "any Borrower", "each Borrower" and
"every Borrower" refer to each of Innovations, Dental, Holdings, Lorvic and
Denticator separately. The obligations of Innovations, Dental, Holdings,
Lorvic and Denticator under the Loan Documents are joint and several.
1.6 REFERENCES TO APPLICABLE LENDING OFFICE. The term "Applicable
Lending Office" means the office of Lender at 000 Xxxxxx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attn: Leveraged Finance Group.
1.7 REFERENCES TO COVERED PERSON. The term "Covered Person" means each
of Innovations, Dental, Holdings, Lorvic and Denticator, and if any of them now
has or acquires any Subsidiaries, each of such Subsidiaries. The words "a
Covered Person", "any Covered Person", "each Covered Person" and "every Covered
Person" refer to Innovations, Dental, Holdings, Lorvic and Denticator and each
of their Subsidiaries separately.
1.8 ACCOUNTING TERMS WITH GAAP MEANINGS; CONSOLIDATED BASIS. Unless the
context otherwise requires, accounting terms herein that are not defined herein
shall have their meanings and shall be calculated under GAAP. All financial
measurements herein respecting "Borrower" shall be made and calculated for
Innovations, Dental, Holdings, Lorvic and Denticator and all of their
Subsidiaries on a consolidated basis in accordance with GAAP.
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1.9 COMPUTATION OF TIME PERIODS. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" shall mean "from and including" and the words "to" and "until" shall
each mean "to but excluding." Periods of days referred to in this Agreement
shall be counted in calendar days unless Business Days are expressly
prescribed, and references in this Agreement to months and years shall be to
calendar months and calendar years unless otherwise specified.
2 COMMITMENTS. Subject to the terms and conditions hereof, and in reliance
upon the representations and warranties of Borrower herein:
2.1 REVOLVING COMMITMENT. Lender commits to make advances to Borrower
(each a "Revolving Advance") from time to time during the period commencing on
the Effective Date and ending at the close of business on the day preceding
December 1, 1999 (the "Ultimate Revolving Maturity Date"). (The from time to
time outstanding principal balance of all Revolving Advances from the Lender is
referred to herein as the "Revolving Loan".) The obligation of Borrower to
repay the Revolving Loan shall be evidenced by a promissory note payable to the
order of Lender in a maximum principal amount equal to the Revolving Commitment
(the "Revolving Note") satisfactory to Lender. Amounts applied to reduce the
Revolving Loan may be reborrowed as Revolving Advances as provided herein. At
any time after an Event of Default occurs that is not waived in writing by
Lender, Lender may cancel the Revolving Commitment as provided in Section 18.3.
2.1.1 LIMITATION ON REVOLVING ADVANCES. No Revolving Advance will
be made which would result in the Revolving Loan exceeding the Revolving
Commitment. Lender may, however, in its sole discretion make such
Revolving Advances, but shall not be deemed by doing so to have increased
the Revolving Commitment and shall not be obligated to make any such
Revolving Advances thereafter. No Revolving Advance will be made on or
after the Ultimate Revolving Maturity Date.
2.1.2 DEFINITION OF REVOLVING COMMITMENT. The "Revolving
Commitment" on any date shall be $6,500,000, or such lesser Dollar amount
to which it may have been reduced as provided herein.
2.2 TERM COMMITMENT. Lender commits to make a term loan to Borrower of
$12,000,000 (the "Term Commitment"). The Term Loan will be made in a single
advance on the Effective Date (the "Term Advance"). (The from time to time
outstanding principal amount of the Term Advance is referred to herein as the
"Term Loan".) The obligation of Borrower to repay the Term Loan shall be
evidenced by a promissory note payable to the order of Lender satisfactory to
Lender (the "Term Note"). Amounts applied to reduce the Term Loan may not be
reborrowed.
3 INTEREST.
3.1 RATES.
3.1.1 REVOLVING LOAN. The Revolving Loan shall bear interest at a
per annum rate equal to the CBR minus 0.5%.
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3.1.2 TERM LOAN. The Term Loan shall bear interest per annum rate
equal to the CBR plus the CBR Increment. The "CBR Increment" shall be
equal to 0.25%; provided, however, if Borrower enters into a Rate
Agreement acceptable to Lender, the CBR Increment shall be equal to 0.0%.
Notwithstanding the foregoing, Borrower may elect to convert the rate per
annum at which all or a portion of the Term Loan bears interest to the
Adjusted LIBOR Rate. The "Adjusted LIBOR Rate" shall be an annual rate of
two and one-half percent (2.50%) plus an interest rate equal to the
quotient (rounded to the nearest 0.001%) of the interest rate at which
Dollar deposits in immediately available funds and for a maturity nearest
in duration to the applicable Interest Period are offered or available in
the London Interbank Market for Eurodollars as of 11:00 a.m. (St. Louis
time) two Business Days before the applicable adjustment date, as reported
on Telerate Screen LIBO page 3750 (rounded to the nearest 1/16%). The
"Interest Period" shall, at Borrower's option, be no less than 30 days nor
more than 180 days.
3.2 RATE AFTER MATURITY. Borrower shall pay interest on a Loan after its
Maturity, and (at the option of Lender) upon all the Loans and other amounts
that are owing with respect thereto after the occurrence of an Event of
Default, at a per annum rate equal to CBR plus 3.0%.
3.3 TIME OF ACCRUAL. Interest shall accrue on all principal amounts
outstanding from and including the date when first outstanding to but excluding
the date when no longer outstanding. Amounts shall be deemed outstanding until
payments are applied thereto as provided herein.
3.4 COMPUTATION. Interest shall be computed for the actual days
elapsed over a year deemed to consist of 360 days. Interest rates that are
based on the CBR shall change simultaneously with any change in the CBR and
such rates shall be effective for the entire day on which such CBR change
becomes effective.
3.5 USURY. Notwithstanding any provisions to the contrary in Section
3 or elsewhere in any of the Loan Documents, Borrower shall not be obligated to
pay interest at a rate which exceeds the maximum rate permitted by Law. If,
but for this Section 3.5, Borrower would be deemed obligated to pay interest at
a rate which exceeds the maximum rate permitted by Law, or if any of the Loan
Obligations is paid or becomes payable before its originally scheduled Maturity
and as a result Borrower has paid or would be obligated to pay interest at such
an excessive rate, then (i) Borrower shall not be obligated to pay interest to
the extent it exceeds the interest that would be payable at the maximum rate
permitted by Law; (ii) any such excess interest that has been paid by Borrower
shall be refunded; and (iii) the effective rate of interest shall be deemed
automatically reduced to the maximum rate permitted by Law.
4 FEES.
4.1 REVOLVING COMMITMENT FEE. Borrower shall pay to lender a
"Revolving Commitment Fee" calculated by applying the daily equivalent of an
annual rate of 0.125% to the Unused Revolving Commitment on each day during the
period from and including the Effective Date to but excluding the Ultimate
Revolving Maturity Date. The "Unused Revolving
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Commitment" on any day shall be the difference between (i) the amount of the
Revolving Commitment and (ii) the Revolving Loan as of the close of business on
such day. The Revolving Commitment Fee shall be payable quarterly, in arrears,
commencing on the first day of October, 1996 and continuing on the first day of
each January, April, July and October thereafter and upon the Ultimate
Revolving Maturity Date.
4.2 CALCULATION OF FEES. All of the foregoing fees that are based on
an annual percentage shall be calculated on the basis of a year deemed to
consist of 360 days and for the actual number of days elapsed.
5 PAYMENTS.
5.1 SCHEDULED PAYMENTS ON REVOLVING LOAN.
5.1.1 INTEREST. Borrower shall pay interest accrued on the
Revolving Loan monthly in arrears, beginning on the first day of the first
full calendar month following the Effective Date, and continuing on the
first day of each calendar month thereafter, and on the Ultimate Revolving
Maturity Date. Borrower shall pay interest accrued on the Revolving Loan
after the Ultimate Revolving Maturity Date on demand.
5.1.2 PRINCIPAL.
5.1.2.1 DAILY PAYMENTS. Borrowers shall maintain one or
more lockboxes with Lender under its standard lockbox agreements (the
"Lockboxes"). Borrower shall also maintain one or more accounts
with Lender, each designated a "Controlled Disbursement Account".
Lender will also establish on its books an account in the name of
Borrower designated as the "Cash Collateral Account". Borrower shall
direct all Account Debtors to remit payments on their Accounts to
one or another of the Lockboxes. If sales of Inventory are made for
cash, Borrower shall immediately deliver to Lender or deposit into
the Cash Collateral Account the identical checks, cash or other
forms of payment which Borrower receives. All proceeds of Collateral
and all funds Borrower receives directly (other than Revolving
Advances) shall be deposited in the Cash Collateral Account.
Deposits in the Cash Collateral Account each day will be applied by
Lender to the Revolving Loan in accordance with Section 5.4 until the
Revolving Loan has been reduced to zero.
5.1.2.2 ULTIMATE REVOLVING MATURITY DATE. Borrower shall
repay the entire Revolving Loan on the Ultimate Revolving Maturity
Date.
5.2 SCHEDULED PAYMENTS ON TERM LOAN.
5.2.1 INTEREST. Borrower shall pay interest accrued on the Term
Loan monthly in arrears, beginning on the first day of the first full
calendar month following the Effective Date, and continuing on the first
day of each calendar month thereafter, and on December 1, 1999 (the
"Ultimate Term Maturity Date"). Borrower shall pay interest accrued on
the Term Loan after the Ultimate Term Maturity Date on demand.
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5.2.2 PRINCIPAL. Borrower shall repay the Term Loan as follows:
Date Principal Payment
---- -----------------
September 1, 1996 $450,000.00
December 1, 1996 $450,000.00
March 1, 1997 $850,000.00
June 1, 1997 $850,000.00
September 1, 1997 $950,000.00
December 1, 1997 $950,000.00
March 1, 1998 $950,000.00
June 1, 1998 $950,000.00
September 1, 1998 $950,000.00
December 1, 1998 $950,000.00
March 1, 1999 $950,000.00
June 1, 1999 $950,000.00
September 1, 1999 $950,000.00
Borrower shall make a final installment equal to the remaining outstanding
principal balance on the Ultimate Term Maturity Date.
5.3 PREPAYMENTS AND REDUCTION OF COMMITMENTS.
5.3.1 VOLUNTARY.
5.3.1.1 REVOLVING LOAN. Borrower may reduce the Revolving
Commitment in whole multiples of $500,000 at any time and from time
to time, but only if (i) Borrower gives Lender written notice of
Borrower's intention to make such reduction at least one Business
Day prior to the effective date of the reduction, and (ii) Borrower
makes on the effective date of the reduction any payment on the
Revolving Loan required under Section 5.3.2.1 as a consequence of the
reduction. Any such reduction of the Revolving Commitment shall be
permanent.
5.3.1.2 TERM LOAN. Borrower may wholly prepay the Term Loan
at any time, and may make partial prepayments on the Term Loan in
amounts equal to up to the next two following scheduled payments of
principal from time to time, but only if (i) Borrower gives Lender
written notice of Borrower's intention to make such prepayment at
least one Business Day prior to tendering the prepayment, and (ii)
Borrower pays any accrued interest on the amount prepaid at the time
of such prepayment. Each partial prepayment on the Term Loan shall
be applied to the next principal installment due hereunder.
5.3.1.3 PREMIUMS. No penalty or premium shall be payable
upon any reduction by Borrower in the Revolving Commitment. No
penalty or premium shall be payable upon any prepayment of the Term
Loan.
5.3.2 MANDATORY.
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5.3.2.1 OVER-ADVANCES. If at any time the Revolving Loan
exceeds the Revolving Commitment, whether as a result of an optional
Revolving Advance by Lender as contemplated by Section 2.1.1 or
otherwise, Borrower shall on demand make a payment to Lender in the
amount of the excess. Each such prepayment shall be applied to
reduce the Revolving Loan.
5.3.2.2 PROCEEDS FROM SALES OF ASSETS. If Borrower sells any
of its assets in a single transaction or related series of
transactions that are not in the ordinary course of business,
Borrower shall make a prepayment on the Term Loan in the amount of
the gross proceeds therefrom less reasonable selling expenses and
the increment in federal, state and local income taxes, if any,
payable as a consequence of any taxable gain from such sale. If,
however, Borrower expends the net proceeds of any such sale of a
capital asset within 90 days of completion of the sale for
replacement of such asset by another asset of comparable type and
utility; and provided that such expenditure will not result in
Borrower exceeding the limits for Capital Expenditures set forth in
Section 17.1 of this Agreement, then Borrower shall not be required
to make such prepayment. Notwithstanding the foregoing, the net
proceeds from Lorvic's sale of the Real Property Collateral situated
at 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx ("Lorvic Property"),
Dental's sale of the Real Property Collateral situated at 0000
Xxxxxxxxx Xxxxxxxxxx, Xxxxxxxx Heights, Missouri ("Maryland Heights
Facility") and the redemption of Borrower's interest in that certain
Allegheny County, Pennsylvania Airport Revenue Bond, Due 2019, in
the original principal amount of $100,000 and that certain Lower
Colorado River Authority Texas Revenue Bond, Due 2009, in the
original principal amount of $100,000 shall be applied to the
Revolving Loan. The Revolving Commitment shall be automatically and
permanently reduced by an amount equivalent to the net proceeds
arising from the sale of the Lorvic Property. Borrower shall be
permitted to finance the sale of its assets by accepting notes for
such Indebtedness; provided, however, that such financing from time
to time does not exceed $150,000 in the aggregate and that the
proceeds of such notes shall be paid to Lender if not expended to
replace the asset sold.
5.3.2.3 PROCEEDS FROM SALE OF SECURITIES. If after the
Execution Date Borrower issues any equity or debt securities, or
warrants or options therefor ("Securities"), Borrower shall make a
prepayment on the Term Loan promptly after such sale in an amount
equal to the gross proceeds therefrom less reasonable brokers' and
underwriters' fees and commissions and other reasonable issuing
expenses ("Securities Proceeds"). Subject to Section 5.3.1.2,
Securities Proceeds not in excess of $2,000,000, in the aggregate,
resulting from the sale of Securities to Persons which are employees
of Borrower shall be applied to the next scheduled payments on the
Term Loan.
5.3.2.4 APPLICATION OF INSURANCE/CONDEMNATION PROCEEDS.
Immediately upon receipt by Borrower of any Insurance/Condemnation
Proceeds, Borrower shall make a prepayment on the Revolving Loan in
the amount of such Insurance/Condemnation Proceeds. On the 90th day
after
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receipt by Borrower of any Insurance/Condemnation Proceeds, Borrower
shall make a prepayment on the Term Loan in the amount of such
Insurance/Condemnation Proceeds that have not, within the 90 day
period following Borrower's receipt of such Insurance/Condemnation
Proceeds, been either expended, or committed to be expended, by
Borrower for the purpose of rebuilding, repairing or replacing the
property for which such Insurance/Condemnation Proceeds were paid.
Except as otherwise provided above, each prepayment under this Section
5.3.2 that is required to be applied to reduce the Term Loan shall be
applied to the scheduled principal installments in the inverse order of
their due dates, except that the net proceeds from the sale of any Real
Property Collateral (not including the Lorvic Property and the Maryland
Heights Facility) shall be applied to the next scheduled principal
payments on the Term Loan, subject to Section 5.3.1.2. If application to
the Term Loan of any prepayment required under this Section 5.3.2 reduces
the Term Loan to zero, the remaining amount of such prepayment shall be
applied to reduce the Revolving Loan and the Revolving Commitment shall be
automatically and permanently reduced by an equivalent amount.
5.4 MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.
5.4.1 PAYMENT REQUIREMENT. Unless expressly provided to the
contrary elsewhere herein, Borrower shall make each payment on the Loan
Obligations to Lender as required under the Loan Documents in Dollars at
the Applicable Lending Office on the date when due, without deduction,
set-off or counterclaim.
5.4.2 APPLICATION OF PAYMENTS. All payments received by Lender
in immediately available funds at or before 2:00 p.m., St. Louis time, on
a Business Day will be applied to the relevant Loan Obligation on the same
day. Such payments received on a day that is not a Business Day or after
2:00 p.m. on a Business Day will be applied to the relevant Loan
Obligation on the next Business Day.
5.4.3 INTEREST CALCULATION. Section notwithstanding, for purposes
of interest calculation only, any payment received by Lender (whether by
cash, check, draft, wire transfer or other instrument) shall be deemed to
have been applied to the relevant Loan Obligation on the Business Day such
funds are deemed collected at or before 2:00 p.m., St. Louis time.
5.4.4 RETURNED CHECKS. If a payment is made by check, draft or
other instrument and the check, draft or other instrument is returned to
Lender unpaid, the application of the payment to the Loan Obligation will
be reversed and will be treated as never having been made.
5.5 DUE DATES NOT ON BUSINESS DAYS. If any payment required hereunder
becomes due on a date that is not a Business Day, then such due date shall be
deemed automatically extended to the next Business Day.
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6 BORROWING PROCEDURE AND LIMITS.
6.1 INITIAL ADVANCES.
6.1.1 REVOLVING ADVANCES. Lender will make the initial Revolving
Advance on the Effective Date as directed by Borrower in a written
direction delivered to Lender. The manner of disbursement shall be subject
to Lender's approval.
6.1.2 TERM ADVANCE. Lender will make the Term Advance on the
Effective Date as directed by Borrower in a written direction delivered to
Lender. The manner of disbursement shall be subject to Lender's approval.
6.2 SUBSEQUENT ADVANCES.
6.2.1 REVOLVING ADVANCES. Subsequent Revolving Advances will be
made only as follows:
6.2.1.1 ADVANCES TO CONTROLLED DISBURSEMENT ACCOUNT. Subject
to the limitations in Section 2.1.1, on each Business Day a Revolving
Advance will be made automatically by Lender to fund the total
Dollar amount of checks and drafts presented to Lender for payment
from the Controlled Disbursement Account.
6.2.1.2 REVOLVING ADVANCE REQUESTS BY BORROWER. Subject to
the limitations in Section 2.1.1, Borrower may also request a
Revolving Advance by submitting a Revolving Advance Request to
Lender. Only a written request (which may be mailed, personally
delivered or telecopied as provided in Section 19.1) from a
Borrowing Officer to Lender that specifies the amount of the
Revolving Advance to be made and the date the proceeds of the
Revolving Advance are requested to be made available to Borrower
(the "Revolving Advance Date") shall be treated as a "Revolving
Advance Request". A Revolving Advance Request received by Lender
on a day that is not a Business Day or that is received by Lender
after 2:00 p.m., St. Louis time, on a Business Day shall be treated
as having been received by Lender at 2:00 p.m., St. Louis time, on
the next Business Day. A Revolving Advance Request shall become
irrevocable a 2:00 p.m., St. Louis time, on the Revolving Advance
Date unless it is sooner revoked by a Borrowing Officer. Lender
shall incur no liability to Borrower for treating any such request
as a Revolving Advance Request or for treating a revocation thereof
as such if Lender believes in good faith that the Person making the
request or revocation is a Borrowing Officer. Lender shall also
incur no liability to Borrower for failing to treat any such request
as Revolving Advance Request or for treating a revocation thereof
as such if Lender believes in good faith that the Person making the
request or revocation is not a Borrowing Officer. Each Revolving
Advance Request by a borrowing officer shall constitute a
certification by Borrower (i) no Default has occurred that is
continuing and not waived in writing by Lender, (ii) all
representations and warranties of Borrower in this Agreement are
then true,
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and will be true on the Revolving Advance Date, as if then
made, and (iii) all conditions precedent hereunder to the making of
the requested Revolving Advance have been satisfied. Provided that
all conditions precedent herein to a requested Revolving Advance
have been satisfied, Lender will make the amount of such requested
Revolving Advance available to Borrower on the Revolving Advance
Date in immediately available funds in Dollars at the Applicable
Lending Office.
6.2.1.3. LENDER'S RIGHT TO MAKE OTHER REVOLVING ADVANCES.
Lender shall have the right to make Revolving Advances at any time
and from time to time to cause timely payment of any of the Loan
Obligations. Lender will give notice to Borrower after making any
such Revolving Advance.
7 APPORTIONMENT, APPLICATION AND REVERSAL OF PAYMENTS. If an Event of
Default has occurred and is continuing, Lender shall determine in its
discretion the order and manner in which proceeds and other payments that Lender
receives are applied to the Loan Obligations, and Borrower hereby irrevocably
waives the right to direct the application of any payment or proceeds. Lender
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such proceeds and payments to any portion of the Loan Obligations.
8 INDEMNITY FOR RETURNED PAYMENTS. If after receipt of any payment
of, or proceeds applied to the payment of, all or any part of the Loan
Obligations, Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, an impermissible setoff, or a diversion of trust funds, or for
any other reason, then the Loan Obligations or part thereof intended to be
satisfied shall be revived and this Agreement shall continue in full force and
Borrower shall be liable to pay to Lender, and hereby does indemnify Lender and
hold Lender harmless for, the amount of such payment or proceeds surrendered.
The provisions of this Section shall be and remain effective notwithstanding
any contrary action which may be taken by Lender in reliance upon any such
payment or application of proceeds, and any such contrary action so taken shall
be without prejudice to Lender's rights under this Agreement and shall be
deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this Section shall
survive termination of the Commitments, the expiration of the any letters of
credit issued by Lender for the account of Borrower and the payment and
satisfaction of all of the Loan Obligations.
9 CAPITAL ADEQUACY REIMBURSEMENT. If there is any change of Law after the
Execution Date regarding the capital that financial institutions
in a class that includes Lender are required to maintain and which has the
effect of reducing the rate of return on, or increasing the cost of
maintaining, Lender's capital as a consequence of its obligations hereunder,
then Lender may from time to time demand, and Borrower shall pay to Lender
within sixty days after each demand, such additional amount as will compensate
Lender for such reduction or increase. If Lender claims compensation under
this Section, Lender shall furnish a certificate to Borrower that states the
additional amount to be paid to it hereunder and includes a description of the
method used by Lender in calculating such amount. Borrower shall have the
burden of proving that any such certificate is not correct. If there is any
change of Law after the Execution Date regarding the capital that financial
institutions in a class that includes
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Lender are required to maintain and which has the effect of increasing the
rate of return on, or decreasing the cost of maintaining, Lender's capital
as a consequence of its obligations hereunder, then Borrower may from time to
time demand, and Lender shall pay to Borrower within sixty days after each
demand, such additional amount as will compensate Borrower for such reduction or
increase. In addition, if Borrower shall fully satisfy the Loan Obligations
within sixty days of receiving the notice referred to above, Lender shall waive
the additional amount payable.
10 SECURITY. As security for payment and performance of the Loan Obligations,
Borrower shall on the Execution Date execute and deliver, or cause to be
executed and delivered, to Lender the following documents:
10.1 SECURITY.
10.1.1 security agreements from Borrower granting to Lender a
security interest in all of the Goods, Equipment, Accounts, Inventory,
Instruments, Documents, Chattel Paper, General Intangibles and other
personal property of Borrower, whether now owned or hereafter acquired,
and all proceeds thereof (the "Personal Property Collateral"), subject
only to Permitted Liens (each such security agreement that Borrower
executes and delivers to Lender, either on or after the Execution Date,
and as it may be amended, restated or replaced from time to time, a
"Security Agreement");
10.1.2 mortgages and deeds of trust granting to Lender liens
covering the real property described in Exhibit 10.12 and all proceeds
thereof (the "Real Property Collateral"), subject only to Permitted Liens
existing on the Execution Date (each such mortgage that Borrower executes
and delivers to Lender, either on or after the Execution Date, and as it
may be amended, restated or replaced from time to time, a "Mortgage");
10.1.3 one or more assignments assigning to Lender a lien and
security interest in all Intellectual Property of Borrower, including but
not limited to all patents, patent applications, inventions upon which
patent applications have not yet been filed, trade names, trademarks,
trademark registrations and applications, service marks, service xxxx
registrations and applications, copyrights and copyright registrations
and applications, both domestic and foreign, described in Exhibit 10.13
and all proceeds thereof (each such assignment that Borrower executes and
delivers to Lender, either on or after the Execution Date, and as it may
be amended, restated, or replaced from time to time, an "Intellectual
Property Assignment");
10.1.4 stock pledge agreements granting to Lender a lien and
security interest in all of the capital stock and other Securities of
each Borrower and every Subsidiary and Affiliate of Borrower, now or
hereafter issued and outstanding, and all proceeds thereof (each such
stock pledge agreement that Borrower executes and delivers to Lender,
either on or after the Execution Date, and as it may be amended, restated,
or replaced from time to time, a "Stock Pledge Agreement");
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10.1.5 assignments assigning to Lender all of Borrower's rights and
interest in all money due or to become due under every contract of
Borrower with any federal Governmental Authority (each a "Government
Contract") in excess of $50,000, (each such assignment that Borrower
executes and delivers to Lender, either on or after the
Execution Date, as it may be amended, restated, or replaced from time to
time, a "Government Contract Assignment");
10.1.6 an assignment assigning to Lender all of Borrower's rights
and interest in the Rate Agreement, if any;
10.1.7 An assignment assigning to Lender all of Borrower's rights
and interest in the Cash Collateral Account (as the same may be amended,
restated, or replaced from time to time, the "Account Assignment");
10.1.8 an assignment assigning to Lender all of Borrower's rights
and interest in (i) all building permits and other governmental licenses
or permits for the expansion of the Earth City Facility, (ii) the plans
and specifications for the expansion of the Earth City Facility, (iii) the
contracts with the design architect, the general contractor, and any other
contractors, architects, or engineers employed by Borrower for the
expansion of the Earth City Facility, and (iv) any and all agreements
regarding the development, construction, leasing, management or
operation of the expansion of the Earth City Facility, together with
consents to the assignment from the parties with whom the Borrower has
contracted; and
As further security for the Loan Obligations, if Borrower acquires or
leases any real property after the Execution Date, Borrower shall notify Lender
thereof and shall deliver to Lender a deed of trust or mortgage, or leasehold
deed of trust or mortgage, as appropriate, on each parcel of such real property
promptly upon request by Lender.
Lender may, in its sole discretion, (i) exchange, waive or release any of
the Collateral, (ii) following an Event of Default that is continuing, apply
Collateral and direct the order or manner of sale thereof as Lender may
determine, and (iii) following an Event of Default that is continuing, settle,
compromise, collect or otherwise liquidate any Collateral in any manner, all
without affecting the Loan Obligations or Lender's right to take any other
action with respect to any other Collateral.
All of the foregoing documents and any similar documents that Borrower
executes and delivers to Lender after the Execution Date to secure the Loan
Obligations, as they may be amended, restated or replaced from time to time,
are referred to herein collectively as the "Security Documents".
11 POWER OF ATTORNEY. Borrower hereby authorizes Lender and irrevocably
appoints Lender (acting by any of its officers) as Borrower's agent and
attorney-in-fact (which appointment is coupled with an interest and is
therefore irrevocable) to do any of the following until all of the Loan
Obligations are fully paid and satisfied and the Commitments are terminated:
11.1 During the continuance of a Default that is not waived in writing
by Lender and after the occurrence of an Event of Default that is not waived in
writing by Lender: (i) demand
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payment of any Account; (ii) enforce payment of any Account by legal
proceedings or otherwise; (iii) exercise all of Borrower's rights and remedies
in proceedings brought to collect any Account; (iv) sell or assign any Account
upon such terms, for such amount and at such time or times as Lender deems
advisable; (v) settle, adjust, compromise, extend or renew any Account; (vi)
discharge and release any Account; (vii) prepare, file and sign Borrower's name
on any proof of claim in bankruptcy or other similar documents against an
Account Debtor; (viii) notify the postal authorities of any change of the
address for delivery of Borrower's mail to any address designed by Lender, and
open and process all mail addressed to Borrower; (ix) endorse Borrower's name on
any verification of Accounts and notices thereof to Account Debtors; (x) make
one or more Revolving Advances to pay the costs and expenses of any of the
foregoing; and (xi) do anything that Lender's deems necessary in its reasonable
discretion to assure that the Loan Obligations are fully paid.
11.2 At any time: (i) take control in any manner of any item of payment
or proceeds of any Account; (ii) have access to any lockbox or postal box into
which Borrower's mail is deposited; (iii) endorse Borrower's name upon any
items of payment and deposit the same in the Cash Collateral Account and apply
the proceeds thereof to the Loan Obligations as provided herein; and (iv)
endorse Borrower's name upon any chattel paper, document, instrument, invoice,
or similar document or agreement relating to any Account.
The foregoing power of attorney and authorization shall be deemed
automatically revoked upon the payment in full of all of the Loan Obligations
and the termination of the Commitments.
12 CONDITIONS OF LENDING.
12.1 CONDITIONS TO INITIAL ADVANCE. As conditions precedent to
Lender's obligation to make the initial Advance:
12.1.1 LISTED DOCUMENTS AND OTHER ITEMS. Lender shall have received
on or before the Effective Date all of the documents and other items
listed or described in Exhibit hereto, with each being (as applicable)
duly executed and (also as applicable) sealed, attested, acknowledged,
certified, or authenticated.
12.1.2 FINANCIAL CONDITION. Lender shall have determined to its
satisfaction that the financial statements of Borrower for the periods
ended June 30, 1996 (the "Initial Financial Statements") and the proforma
financial statements of Borrower for the period ending as of the Effective
Date and the periods ending June 30, 1996 (the "Proforma Financial
Statements") as furnished to Lender and other information furnished to
Lender by Borrower (i) for the periods ended on or before the Effective
Date, fairly and accurately reflect the business and financial condition of
Borrower, its cash flows and the results of its operations for such
periods, and (ii) for the periods that will end after the Effective Date,
reflect Borrower's best estimate and forecast of the business and
financial condition of Borrower, its cash flows, and the results of its
operations for such periods.
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12.1.3 NO DEFAULT. No Default shall have occurred and be
continuing that is not waived in writing by Lender, no Event of Default
shall have occurred that is not waived in writing by Lender, and neither
will occur as a result of such Advance being requested or made or the
application of the proceeds thereof.
12.1.4 PERFECTION OF LIENS AND SECURITY INTERESTS. Every lien and
security interest required to be granted by Borrower to Lender under
Section shall have been perfected and shall be, except as otherwise
satisfactory to Lender, a first priority lien or security interest.
12.1.5 REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in the Loan Documents shall be true and correct.
12.1.6 MATERIAL ADVERSE CHANGE. Since the date of the most recent
Financial Statements delivered to Lender, there shall not have been any
change which would have a Material Adverse Effect.
12.1.7 PENDING MATERIAL PROCEEDINGS. There shall be no pending
Material Proceedings.
12.1.8 PAYMENT OF FEES. Borrower shall have paid and reimbursed to
Lender all fees, costs and expenses that are payable or reimbursable to
Lender hereunder on or before the Effective Date.
12.1.9 LEGAL OPINION. Lender shall have received an opinion of
Borrower's counsel satisfactory to Lender.
12.1.10 RELATED TRANSACTION DOCUMENTS. All documents to be executed
and delivered in connection with Innovation's acquisition of certain assets
of Denticator International, Inc., a California corporation ("Acquisition")
shall have been delivered to Lender in final form and shall be reasonably
satisfactory to Lender and the Acquisition shall have closed.
12.1.11 OTHER ITEMS. Lender shall have received such other consents,
approvals, opinions, certificates or documents as it reasonably deems
necessary.
12.2 CONDITIONS TO SUBSEQUENT ADVANCES. The obligation of Lender
to make any subsequent Advance shall be subject to the prior or concurrent
fulfillment of each of the following additional conditions precedent:
12.2.1 GENERAL CONDITIONS. All of the conditions to the initial
Advances in Section shall have been and shall remain satisfied.
12.2.2 REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in the Loan Documents shall be true and correct as of
the time of such Advance, with the same force and effect as if made at such
time.
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12.2.3 DEFAULT. No Default shall have occurred and be continuing
that is not waived in writing by Lender, no Event of Default shall have
occurred that is not waived in writing by Lender, and neither will occur
as a result of such Revolving Advance being requested or made or the
application of the proceeds thereof.
13 REPRESENTATIONS AND WARRANTIES.
Except as otherwise described the disclosure schedule that is attached
hereto as Exhibit (the "Disclosure Schedule"), Borrower represents and
warrants to Lender as follows:
13.1 ORGANIZATION AND EXISTENCE. Each Covered Person is duly organized
and existing in good standing under the laws of the state of its organization,
is duly qualified to do business and is in good standing in every state where
the nature or extent of its business or properties require it to be qualified
to do business, except where the failure to so qualify will not have a Material
Adverse Effect. Each Covered Person has the power and authority to own its
properties and carry on its business as now being conducted.
13.2 AUTHORIZATION. Each Covered Person is duly authorized to execute
and perform every Loan Document to which such Covered Person is a party, and
Borrower is duly authorized to borrow hereunder, and this Agreement and the
other Loan Documents have been duly authorized by all requisite corporate
action of each Covered Person. No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority, and no consent of any
other Person, is required in connection with Borrower's execution, delivery or
performance of this Agreement and the other Loan Documents, except for those
already duly obtained.
13.3 DUE EXECUTION. Every Loan Document to which a Covered Person is a
party has been executed on behalf of such Covered Person by a Person duly
authorized to do so.
13.4 ENFORCEABILITY OF OBLIGATIONS. Each of the Loan Documents to which
a Covered Person is a party constitutes the legal, valid and binding obligation
of such Covered Person, enforceable against such Covered Person in accordance
with its terms, except to the extent that the enforceability thereof against
such Covered Person may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by
equitable principles of general application.
13.5 BURDENSOME OBLIGATIONS. No Covered Person is a party to or bound
by any Contract or is subject to any provision in the Charter Documents of such
Covered Person which would, if performed by such Covered Person, result in a
Default or Event of Default either immediately or upon the elapsing of time.
13.6 LEGAL RESTRAINTS. The execution of any Loan Document by a Covered
Person will not violate or constitute a default under the Charter Documents of
such Covered Person, any Material Agreement of such Covered Person, or any
Material Law, and will not, except as expressly contemplated or permitted in
this Agreement, result in any Security Interest being imposed on any of such
Covered Person's property. The performance by any Covered Person of its
obligations under any Loan Document to which it is a party will not violate or
constitute
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a default under the Charter Documents of such Covered Person, any Material
Agreement of such Covered Person, or any Material Law, and will not, except as
expressly contemplated or permitted in this Agreement, result in any Security
Interest being imposed on any of such Covered Person's property.
13.7 LABOR DISPUTES. There is no collective bargaining agreement or other
labor contract covering employees of a Covered Person, and no such collective
bargaining agreement or other labor contract is scheduled to expire during the
term of this Agreement. No union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees of a
Covered Person for any similar purpose, and there is no pending or, to the best
of Borrower's knowledge, threatened, strike, work stoppage, material unfair
labor practice claim or other material labor dispute against or affecting any
Covered Person or its employees.
13.8 NO MATERIAL PROCEEDINGS. There are no Material Proceedings
pending or, to the best knowledge of Borrower, threatened.
13.9 MATERIAL LICENSES. All Material Licenses have been obtained or
exist for each Covered Person.
13.10 COMPLIANCE WITH LAWS. Each Covered Person is in compliance with
all Material Laws. Without limiting the generality of the foregoing:
13.10.1 COMPLIANCE. The operations of every Covered Person comply in
all material respects with all applicable FDA Laws, Environmental Laws and
Employment Laws.
13.10.2 PROCEEDINGS. None of the operations of any Covered Person
are the subject of any judicial or administrative complaint, order or
proceeding alleging the violation of any applicable FDA Laws, Environmental
Laws or Employment Laws.
13.10.3 INVESTIGATIONS. None of the operations of any Covered Person
are the subject of investigation by any Governmental Authority regarding
violations of FDA Laws or the improper transportation, storage, disposal,
generation or release into the environment of any Hazardous Waste, the
results of which may have a Material Adverse Effect on such Covered Person,
on the value of the Collateral, or on the overall assets of such Covered
Person.
13.10.4 NOTICES; REPORTS. No notice or report under any
Environmental Law indicating a past or present spill or release into the
environment of any Hazardous Waste has been filed, or is required to be
filed, by any Covered Person.
13.10.5 REAL PROPERTY. No Covered Person, nor to the best of
Borrower's knowledge, any other Person, has at any time transported,
stored, disposed of, generated or released any Hazardous Waste on the
surface, below the surface, or within the boundaries of any real property
owned or operated by such Covered Person or any improvements thereon.
Borrower has no knowledge of any Hazardous Waste on the surface, below the
surface, or within the boundaries of any real property owned
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or operated by such Covered Person or any improvements thereon. No
property such Covered Person is subject to a Security Interest in favor of
any Governmental Authority for any liability under any Environmental Law or
damages arising from or costs incurred by such Governmental Authority in
response to a spill of release of Hazardous Waste into the environment.
13.10.6 ENVIRONMENTAL PROPERTY TRANSFER ACTS. No Environmental
Property Transfer Acts are applicable to the transactions contemplated by
this Agreement or the Acquisition Agreement and Borrower has provided all
notices and obtained all necessary environmental permit transfers and
consents, if any, required in order to consummate the transactions
contemplated by this Agreement or the Acquisition Agreement, to perfect
Lender's Security Interests and to operate Borrower's business as presently
or proposed to be operated.
13.10.7 WAGE AND HOUR LAWS. Each Covered Person to which any of the
Wage and Hour Laws apply pays its employees in compliance with such Laws.
13.11 OTHER NAMES. No Covered Person has used any name other than the full
name which identifies such Covered Person in this Agreement. The only trade
name or style under which a Covered Person sells Inventory or creates Accounts,
or to which instruments in payment of Accounts are made payable, is the name
which identifies such Covered Person in this Agreement.
13.12 ACQUISITION.
13.12.1 CONSUMMATION OF ACQUISITION. Borrower has delivered to Lender
complete and correct executed copies of the Acquisition Agreement, all
amendments, schedules and exhibits thereto, and all other agreements,
documents and certificates which have been executed and delivered in
connection with the transactions contemplated thereby. The Acquisition
Agreement has been duly authorized and executed and is the valid and
binding obligation of Borrower and the other parties thereto and is
enforceable in accordance with its terms. Each of the parties to the
Acquisition Agreement has performed all obligations, covenants and
conditions required of it prior to or as a condition to the consummation of
the transactions contemplated by the Acquisition Agreement, and no such
obligation, covenant or condition has been waived by any party. Borrower
is not in default of any of its obligations under the Acquisition
Agreement, and all representations and warranties of Borrower in the
Acquisition Agreement are complete and correct in all material respects as
of the Effective Date as if made on and as of such date.
13.12.2 PRIOR TRANSACTIONS. Except as has been disclosed to Lender,
no Covered Person has been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or acquired
any of its property outside of the ordinary course of business which
continues to subject such Covered Person to a contingent liability.
13.13 CAPITALIZATION. Innovation's authorized capital stock consists of
25,000,000 shares of common stock, par value $.01 per share, of which 3,708,512
shares are validly
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issued and outstanding, fully paid and non-assessable, and are owned
beneficially and of record by those Persons described in the Disclosure
Schedule.
13.14 CAPITALIZATION. Dental's authorized capital stock consists of
600,000 shares of common stock, par value $.50 per share, of which 311,640
shares are validly issued and outstanding, fully paid and non-assessable, and
are owned beneficially and of record by Innovation.
13.15 CAPITALIZATION. Lorvic's authorized capital stock consists of
1,000 shares of common stock, par value $0.01 per share, of which 100 shares
are validly issued and outstanding, fully paid and non-assessable, and are
owned beneficially and of record by Holdings.
13.16 CAPITALIZATION. Holding's authorized capital stock consists of
100,000 shares of stock (30,000 10% cumulative preferred stock-$1 par, 60,000
Class A common-$.01 par and 10,000 Class B common-$.01 par) of which 1,000
Class A common shares are validly issued and outstanding, fully paid and
non-assessable, and are owned beneficially and of record by Dental.
13.17 CAPITALIZATION. Denticator's authorized capital stock consists
of 30,000 shares of common stock, par value $1.00 per share, of which 1,000
shares are validly issued and outstanding, fully paid and non-assessable, and
are owned beneficially and of record by Innovations.
13.18 SOLVENCY. Borrower is Solvent prior to and after giving effect
to the transactions contemplated by the Acquisition Agreement, and the making
of the Term Loan and initial Revolving Advance on the Effective Date.
13.19 PROJECTIONS; PRO FORMA BALANCE SHEET. The projections of
Borrower's quarterly financial condition, results of operations and cash flow
for the 1997 Fiscal Year, a copy of which have been delivered to Lender,
represent Borrower's best estimate of Borrower's future financial performance
for the periods set forth therein. Such projections have been prepared on the
basis of the assumptions set forth therein, which Borrower believes are fair
and reasonable in light of current and reasonably foreseeable business
conditions. The pro forma balance sheet of Borrower as of the Effective Date,
a certified copy of which has been provided by Borrower to Lender has been
prepared in accordance with GAAP and presents Borrower's best estimate and
forecast of Borrower's financial condition as of the Effective Date as if the
transactions contemplated by the Acquisition Agreement had occurred on the
Effective Date.
13.20 FINANCIAL STATEMENTS. The Initial Financial Statements are
complete and correct, have been prepared in accordance with GAAP, and fairly
reflect the financial condition, results of operations and cash flows of the
Persons covered thereby as of the dates and for the periods stated therein.
13.21 NO CHANGE IN CONDITION. Since the date of the Initial Financial
Statements delivered to Lender, there has been no change which would have a
Material Adverse Effect on any Covered Person.
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13.22 NO DEFAULTS. No Covered Person has breached or violated or is in
default under any Material Agreement, or is in default with respect to any
Material Obligation of such Covered Person. No Default has occurred which is
continuing and no Event of Default has occurred.
13.23 INVESTMENTS. No Covered Person has any Investments in other
Persons except existing Permitted Investments.
13.24 INDEBTEDNESS. No Covered Person has any Indebtedness except
existing Permitted Indebtedness.
13.25 INDIRECT OBLIGATIONS. No Covered Person has any Indirect
Obligations except existing Permitted Indirect Obligations.
13.26 ENCUMBRANCES. None of the real property purported to be owned by
a Covered Person is subject to any Encumbrances except existing Permitted
Encumbrances.
13.27 OPERATING LEASES. No Covered Person has an interest as lessee
under any Operating Leases.
13.28 CAPITAL LEASES. No Covered Person has an interest as a lessee
under any Capital Leases.
13.29 TAX LIABILITIES; GOVERNMENTAL CHARGES. Each Covered Person has
filed or caused to be filed all tax reports and returns required to be filed by
it with any Governmental Authority, except where extensions have been properly
obtained, and has paid or made adequate provision for payment of all taxes,
assessments, fees and other charges levied upon it or upon its income or
properties by any Governmental Authority which are due and payable, including
interest and penalties, except such taxes, assessments, fees and other charges,
if any, as are being diligently contested in good faith by appropriate
proceedings and as to which such Covered Person has established adequate
reserves in conformity with GAAP on the books of such Covered Person. No
Security Interests for any such taxes, assessments, fees or other charges have
been filed and no claims are being asserted with respect to any such taxes,
assessments, fees or other charges which, if adversely determined, would have a
Material Adverse Effect on such Covered Person. There are no material
unresolved issues concerning any tax liability of a Covered Person which, if
adversely determined, would have a Material Adverse Effect on such Covered
Person.
13.30 PENSION BENEFIT PLANS. All Pension Benefit Plans maintained by
each Covered Person or an ERISA Affiliate qualify under Section 401 of the Code
and are in compliance with the provisions of ERISA. Except with respect to
events or occurrences which would not have a Material Adverse Effect:
13.30.1 PROHIBITED TRANSACTIONS. None of such Pension Benefit Plans
has participated in, engaged in or been a party to any non-exempt
prohibited transaction as defined in ERISA or the Code, and no officer,
director or employee of a Covered Person orof an ERISA Affiliate has
committed a breach of any of the responsibilities or obligations imposed
upon fiduciaries by Title I of ERISA.
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13.30.2 CLAIMS. There are no claims, pending or threatened,
involving any such Pension Benefit Plan by a current or former employee
(or beneficiary thereof) of such Covered Person or ERISA Affiliate, nor is
there any reasonable basis to anticipate any claims involving any such
Pension Benefit Plan which would likely be successfully maintained against
such Covered Person or ERISA Affiliate.
13.30.3 REPORTING AND DISCLOSURE REQUIREMENTS. There are no
violations of any reporting or disclosure requirements with respect to any
such Pension Benefit Plan and none of such Pension Benefit Plans has
violated any applicable Law, including but not limited to ERISA and the
Code.
13.30.4 ACCUMULATED FUNDING DEFICIENCY. No such Pension Benefit Plan
has (i) incurred an "accumulated funding deficiency" (within the meaning of
Section 412(a) of the Code), whether or not waived; (ii) been a Pension
Benefit Plan with respect to which a Reportable Event (to the extent that
the reporting of such events to the PBGC within thirty days of the
occurrence has not been waived) has occurred and is continuing; or (iii)
been a Pension Benefit Plan with respect to which there exist conditions or
events which have occurred that present a significant risk of termination
of such Pension Benefit Plan by the PBGC.
13.30.5 MULTI-EMPLOYER PLAN. No Covered Person or ERISA Affiliate
has received notice that any Multi-employer Plan to which such Covered
Person or ERISA Affiliate contributes is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no Multi-employer
Plan to which such Covered Person or ERISA Affiliate contributes is
reasonably expected to be in reorganization or to be terminated within the
meaning of Title IV of ERISA.
13.31 WELFARE BENEFIT PLANS. No Covered Person or ERISA Affiliate
maintains a Welfare Benefit Plan that has a liability which, if enforced or
collected, would have a Material Adverse Effect. Each Covered Person and ERISA
Affiliate has complied in all material respects with the applicable requirements
of Section 4980B of the Code pertaining to continuation coverage as mandated by
COBRA.
13.32 RETIREE BENEFITS. No Covered Person or ERISA Affiliate has an
obligation to provide any Person with any medical, life insurance, or similar
benefit following such Person's retirement or termination of employment (or to
such Person's beneficiary subsequent to such Person's death) other than (i) such
benefits provided to Persons at such Person's sole expense and (ii) obligations
under COBRA.
13.33 DISTRIBUTIONS. On and after the Execution Date, no Distribution has
been declared, paid or made upon or in respect of any capital stock or other
Securities of Borrower except as expressly permitted hereby.
13.34 REAL ESTATE; LEASES. Exhibit 13.34 sets forth a correct and complete
list of all real estate owned by Borrower, all leases and subleases of real or
personal property by Borrower as lessee or sublessee, and all leases and
subleases of real and personal property by Borrower as lessor, lessee, sublessor
or sublessee. Each of such leases and subleases is
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valid and enforceable in accordance with its terms and is in full force and
effect, and no default by any party to any such lease or sublease exists.
13.35 STATE OF COLLATERAL AND OTHER PROPERTY. Each Covered Person has
good and marketable or merchantable title to all real and personal property
purported to be owned by it or reflected in the Initial Financial Statements,
except for personal property sold in the ordinary course of business after the
date of the Initial Financial Statements. There are no Security Interests on
any of the property purported to be owned by any Covered Person, including the
Collateral, except existing Permitted Liens. Each tangible item of Personal
Property Collateral purported to be owned by a Covered Person is in good
operating condition and repair and is suitable for the use to which it is
customarily put by its owner. Without limiting the generality of the foregoing:
13.35.1 ACCOUNTS. With respect to each Account scheduled, listed
or referred to in reports submitted by Borrower to Lender pursuant to the
Loan Documents, except as disclosed therein: (i) the Account arose from a
bona fide transaction completed in accordance with the terms of any
documents pertaining to such transaction; (ii) the Account is not evidenced
by a judgment and there is no material dispute respecting it; (iii) the
amount of the Account as shown on Borrower's books and records and all
invoices and statements which may be delivered to Lender with respect
thereto are actually and absolutely owing to Borrower and are not in any
way contingent, other than returns of items for which a credit may be
issued in the ordinary course of business; (iv) there are no set-offs,
counterclaims or disputes existing or asserted with respect to the Account
and Borrower has not made any agreement with any Account Debtor for any
deduction therefrom except a discount or allowance allowed by Borrower in
the ordinary course of its business for prompt payment; (v) there are no
facts, events or occurrences which in any way impair the validity or
enforcement of the Account or tend to reduce the amount payable thereunder
as shown on Borrower's books and records and all invoices and statements
delivered to Lender with respect thereto, (provided, however, that with
respect to items (ii) through (v), inclusive, a reserve of $50,000 in the
aggregate shall be allowed); (vi) the Account is assignable; (vii) the
Account arose in the ordinary course of Borrower's business; (viii) to the
best of Borrower's knowledge, the Account Debtor with respect to the
Account has the capacity to contract; (ix) the services furnished and/or
goods sold giving rise to the Account are not subject to any Security
Interest except the first priority, perfected Security Interest of Lender
and except the Permitted Liens; (x) to the best of Borrower's knowledge,
there are no proceedings or actions which are threatened or pending against
the Account Debtor with respect to the Account; and (xi) no payments have
been or shall be made on the Account except payments promptly delivered to
Lender or to other financial institutions approved by Lender pursuant to
this Agreement.
13.35.2 INVENTORY. With respect to Inventory scheduled, listed or
referred to in any certificate, schedule, list or report given by Borrower
except as disclosed therein: (i) such Inventory (except for Inventory in
transit) is located at one or another of the premises listed on Exhibit
13.36; (ii) Borrower has good and merchantable title to such Inventory
subject to no Security Interest whatsoever except for the first priority,
perfected security interest granted to Lender in connection herewith and
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except for existing Permitted Liens; (iii) such Inventory is of good and
merchantable quality, free from any materials defect; (iv) such Inventory
is not subject to any licensing, patent, royalty, trademark, trade name or
copyright agreements with any third parties; and (v) the completion of
manufacture and sale or other disposition of such Inventory by Lender
following an Event of Default shall not require the consent of any Person
and shall not constitute a breach or default under any contract or
agreement to which Borrower is a party or to which the Inventory is
subject.
13.35.3 EQUIPMENT. With respect to the Borrower's equipment: (i)
Borrower has good and marketable title thereto; (ii) none of such
equipment is subject to any Security Interest except for the first
priority security interest granted to Lender pursuant hereto and except
for Permitted Liens; (iii) all such equipment is in good operating
condition and repair, ordinary wear and tear alone excepted, and is
suitable for the uses to which customarily put in the conduct of
Borrower's business; and (iv) none of such equipment used in the conduct
of Borrower's business is leased, other than leases of non-material items
of office equipment.
13.35.4 INTELLECTUAL PROPERTY. (i) Exhibit 10.13 sets forth a correct
and complete list of all of Borrower's Intellectual Property, (ii)
Borrower owns all right, title and interest in, under and to such
Intellectual Property, subject to no licenses or any interest therein or
other agreements relating thereto, except for the Intellectual Property
Assignments; (iii) no Intellectual Property or grant of license by or to
Borrower is subject to any pending or, to the best of Borrower's
knowledge, threatened challenge; (iv) to the best of Borrower's knowledge,
Borrower has not committed any patent, trademark, trade name, service xxxx
or copyright infringement, and the present conduct of Borrower's business
does not infringe any patents, trademarks, trade name rights, service
marks, copyrights, publication rights, trade secrets or other proprietary
rights of any Person; and (v) there are no claims or demands of any Person
pertaining to, or any proceedings which are pending or, to the best of
Borrower's knowledge, threatened, which challenge Borrower's rights in
respect of any proprietary or confidential information or trade secrets
used in the conduct of Borrower's business.
13.35.5 DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. All documents,
instruments and chattel paper describing, evidencing or constituting
Collateral, and all signatures and endorsements thereon, are complete,
valid, and genuine, and all goods evidenced by such documents, instruments
and chattel paper are owned by Borrower free and clear of all Security
Interests other than Permitted Liens.
13.36 CHIEF PLACE OF BUSINESS; LOCATIONS OF COLLATERAL. As of the
Execution Date, the chief executive office and the principal places of business
of Borrower are located at the places listed and so identified on Exhibit
13.36. As of the Execution Date, the books and records of Borrower, and all of
the Borrower's chattel paper and all records of Accounts, are located at the
places listed and so identified on Exhibit 13.36. As of the Execution Date,
all of the Collateral (except for Inventory which is in transit and Borrower's
Real Property Collateral) is located at the places listed and so identified on
Exhibit 13.36. There is no office or place of business at which Borrower
conducts business except those identified as its chief executive office, its
places of business, and the places where its books and records pertaining to
Accounts and chattel paper are kept as so identified on Exhibit 13.36.
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13.37 NEGATIVE PLEDGES. No Covered Person is a party to or bound by any
Contract which prohibits the creation or existence of any Security Interest
upon or assignment or conveyance of any of the Collateral.
13.38 SECURITY DOCUMENTS. To the best of Borrowers' knowledge:
13.38.1 MORTGAGES. The Mortgages are effective to grant to Lender
a legal, valid and enforceable mortgage lien on the Real Property
Collateral. Upon proper recording and payment of recording fees and
taxes, if any, Lender will have a fully perfected first priority lien on
the Real Property Collateral subject only to Permitted Liens affecting the
Real Property Collateral.
13.38.2 SECURITY AGREEMENTS. The Security Agreements are effective
to grant to Lender an enforceable security interest in all rights, title
and interest of Borrower in the Personal Property Collateral. Upon
appropriate filing (as to all Personal Property Collateral in which a
security interest may be perfected under the applicable state's UCC by
filing a financing statement) or Lender's taking possession (as to items
of the Personal Property Collateral of which a secured party must take
possession in order to perfect a security interest under the applicable
state's UCC), Lender will have a fully perfected first priority security
interest in the Personal Property Collateral described in the Security
Agreements, subject only to Permitted Liens affecting the Personal
Property Collateral.
13.38.3 INTELLECTUAL PROPERTY ASSIGNMENTS. The Intellectual Property
Assignments are effective to assign to Lender all of Borrower's rights,
title and interest in and to the Intellectual Property, subject only to
Permitted Liens affecting the Intellectual Property.
13.38.4 STOCK PLEDGE. The Stock Pledge Agreements are effective to
grant to Lender a security interest in and lien on all rights and interest
in the stock and other Securities described therein.
13.38.5 GOVERNMENT CONTRACT ASSIGNMENTS. Each Contract Assignment,
if any, is effective to transfer to Lender ownership of all money due or to
become due under the Government Contract to which such Government Contract
Assignment applies. Upon proper filing of the notices of assignment and
assignment with respect to each Contract Assignment, each such Contract
Assignment will be effective to cause the United States to pay directly to
Lender all money due or to become due under the Government Contract to
which such Government Contract Assignment applies.
13.38.6 ACCOUNT ASSIGNMENT. The Account Assignment is effective to
grant to Lender an enforceable Security Interest in all rights, title and
interest of Borrower in the Cash Collateral Account.
13.39 S CORPORATION. There is no election in effect under Section 1362(a)
of the Code for Borrower to be treated as an "S Corporation" as defined in
Section 1361(a) of the Code.
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13.40 SUBSIDIARIES AND AFFILIATES. Exhibit 13.40 is a correct and complete
list of the name and relationship to Borrower of each and all of Borrower's
Affiliates and Subsidiaries.
13.41 BANK ACCOUNTS AND LOCKBOXES. Borrower has no lockbox other than the
lockboxes allowed or required hereunder. Exhibit 13.41 contains a complete and
accurate list of all bank accounts maintained by Borrower with any bank or
other financial institution.
13.42 MARGIN STOCK. Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" "margin stock" (within the
meaning of Regulation U), and no part of the proceeds of any Advance will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation U or Regulation G. None of the transactions contemplated by the
Acquisition Agreement will violate Regulations G, T, U or X of the FRB.
13.43 SECURITIES MATTERS. No proceeds of any Advance will be used to
acquire any security in any transaction which is subject to Sections 13 and 14
of the Securities Exchange Act of 1934, as amended.
13.44 INVESTMENT COMPANY ACT, ETC. Borrower is not an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or a company "controlled" (within the meaning of such
Investment Company Act) by such an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended. Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act
or any other Law limiting or regulating its ability to incur Indebtedness for
money borrowed.
13.45 NO MATERIAL MISSTATEMENTS OR OMISSIONS. Neither the Loan Documents,
any of the Financial Statements nor any statement, list, certificate or other
information furnished or to be furnished by Borrower to Lender in connection
with the Loan Documents or any of the transactions contemplated thereby
contains, to the best of Covered Persons' knowledge, any untrue statement of a
material fact, or omits to state a material fact necessary to make the
statements therein not misleading. Borrower has disclosed to Lender everything
regarding the business, operations, property, financial condition, or business
prospects or itself and every Covered Person that would have a Material Adverse
Effect on Borrower or any Covered Person.
13.46 FILINGS. All registration statements, reports, proxy statements and
other documents, if any, required to be filed by Borrower with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, have been filed, and such
filings are complete and accurate and contain no untrue statements of material
fact or omit to state any material facts required to be stated therein or
necessary in order to make the statements therein not misleading.
13.47 BROKER'S FEES. No broker or finder is entitled to compensation for
services rendered with respect to the transactions described in this Agreement.
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13.48 DISCLOSURE. Neither this Agreement nor any document or statement
furnished to Lender by or on behalf of Borrower hereunder contains, to the best
of Borrowers' knowledge, any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements contained
herein or therein not misleading.
14 SURVIVAL OF REPRESENTATIONS. All representations and warranties in
Section #13, and all representations and warranties in any certificate
delivered by Borrower pursuant hereto, shall survive execution of each of the
Loan Documents and the making of every Advance, and may be relied upon by
Lender as being true and correct until all of the Loan Obligations are fully
and irrevocably paid.
15 AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as the Revolving Commitment
remains in effect or any of the Loan Obligations are owing to Lender by
Borrower, Borrower shall do, or cause to be done, the following:
15.1 USE OF PROCEEDS. Subject to the terms and conditions hereof, the
proceeds of the Term Advance and the initial Revolving Advance shall be used
solely to extinguish the existing Indebtedness of Borrower to United Missouri
Bank of St. Louis, National Association and payment of costs and expenses
related to the Acquisition. Subsequent Revolving Advances shall be used solely
for general corporate purposes, including but not limited to the 1996 Earth
City Facility expansion, expenditures permitted hereunder and as the source for
payment of Borrower's reimbursement obligations with respect to standby letters
of credit issued by Lender for the account of Borrower.
15.2 CORPORATE EXISTENCE. Each Covered Person shall maintain its
existence in good standing and its right to transact business in those states
in which it is now or hereafter doing business; provided, however, that a
Covered shall not be prohibited from merging with and into another Covered
Person. Each Covered Person shall obtain and maintain all Material Licenses
for such Covered Person.
15.3 MAINTENANCE OF PROPERTY AND LEASES. Each Covered Person shall
maintain in good condition and working order, and repair and replace as
required, all buildings, equipment, machinery, fixtures and other real and
personal property whose useful economic life has not elapsed and which is
necessary for the ordinary conduct of the business of such Covered Person.
Each Covered Person shall maintain in good standing and free of defaults all of
its leases of buildings, equipment, machinery, fixtures and other real and
personal property whose useful economic life has not elapsed and which is
necessary for the ordinary conduct of the business of such Covered Person.
Borrower shall not permit any of its equipment or other property to become a
fixture to real property or an accession to other personal property unless
Lender has a valid, perfected and first priority Security Interest in such real
or personal property. Borrower will not, without Lender's prior written
consent, alter or remove any identifying symbol or number on its equipment.
15.4 INVENTORY. Borrower shall keep its Inventory in good and
merchantable condition at its own expense and shall hold such Inventory for
sale or lease, or to be furnished in connection with the rendition of services,
in the ordinary course of Borrower's business, on
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terms for such Inventory which do not include for sales greater than 0.75% in
the aggregate of Borrower's year to date sales, xxxx-and-hold, guaranteed sale,
sale and return, sale on approval, consignment or similar repurchase or return
terms. All such Inventory shall be produced in accordance with the Federal
Fair Labor Standards Act of 1938, as amended, and all rules, regulations and
orders thereunder.
15.5 INSURANCE. Each Covered Person shall maintain insurance as required
the Insurance Specification which is attached to and made part of Exhibit
12.1.1. Lender is authorized, but not obligated, as the attorney-in-fact for
Borrower, (i) prior to the occurrence of an Event of Default (with Borrower's
consent, which shall not be unreasonably withheld), and upon the occurrence of
an Event of Default, without Borrower's consent, to adjust and compromise
proceeds payable under such policies of insurance, (ii) to collect, receive and
give receipts for such proceeds in the name of Borrower and Lender, and (iii)
to endorse Borrower's name upon any instrument in payment thereof. Such power
granted to Lender shall be deemed coupled with an interest and shall be
irrevocable. Borrower shall upon request of Lender at any time furnish to
Lender evidence reasonably satisfactory to Lender that such insurance exists
and that all premiums due therefor have been paid.
15.6 PAYMENT OF TAXES AND OTHER OBLIGATIONS. Each Covered Person shall
promptly pay and discharge or cause to be paid and discharged, as and when due,
any and all income taxes, federal or otherwise, lawfully assessed and imposed
upon it, and any and all lawful taxes, rates, levies, and assessments
whatsoever upon its properties and every part thereof, or upon the income or
profits therefrom and all claims of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons for labor, materials, supplies,
storage or other items or services which if unpaid might be or become a
Security Interest or charge upon any of its property; provided, however, that
nothing herein contained shall be construed as prohibiting a Covered Person
from diligently contesting in good faith by appropriate proceedings the
validity of any such taxes, rates, levies, or assessments, provided such
Covered Person has established adequate reserves therefor in conformity with
GAAP on the books of such Covered Person, and no Security Interest, other than
a Permitted Lien, results from such non-payment.
15.7 COMPLIANCE WITH LAWS. Each Covered Person shall comply with all
Material Laws. Without limiting the generality of the foregoing:
15.7.1 ENVIRONMENTAL LAWS. Each Covered Person shall comply and
shall use commercially reasonable efforts to ensure compliance by all
tenants, subtenants and other occupants, if any, with all Environmental
Laws.
15.7.2 PENSION BENEFIT PLANS. Each Covered Person and each Erisa
Affiliate shall comply with all reporting and disclosure requirements and
all provisions of the Code and ERISA applicable to any Pension Benefit
Plan maintained by such Covered Person or ERISA Affiliate.
15.7.3 EMPLOYMENT LAWS. Each Covered Person shall comply with all
requirements of all Employment Laws applicable to such Covered Person.
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15.7.4 FDA LAWS. Each Covered Person shall comply with all
requirements of all FDA Laws applicable to such Covered Person.
15.8 DISCOVERY AND CLEAN-UP OF HAZARDOUS WASTE.
15.8.1 IN GENERAL. Upon any Covered Person receiving notice of any
violation of Environmental Laws or any similar notice described in
Section 15.10.2, or upon any Covered Person otherwise discovering
Hazardous Waste on any property which is in violation of, or which would
result in liability under, any Environmental Law, Borrower shall: (i)
promptly take such acts as may be required to prevent danger or harm to
the property or any person therein as a result of such Hazardous Waste;
(ii) at the request of Lender, and at Borrower's sole cost and expense,
obtain and deliver to Lender promptly, but in no event later than 90 days
after such request, a then currently dated environmental assessment of the
property certified to Lender and any future holder of the Loan
Obligations, a proposed plan for responding to any environmental problems
described in such assessment, and an estimate of the costs thereof; and
(iii) take all necessary steps to initiate and expeditiously complete all
removal, remedial, response, corrective and other action to eliminate any
such environmental problems, and keep Lender informed of such actions and
the results thereof. Nothing in this Section 15.8.1 shall be construed to
prevent Covered Person from diligently and in good faith, contesting,
challenging or settling any claim or allegation that an Environmental Law
has been violated. Covered Person shall not be obligated to take action
under subpart (iii) of this Section 15.8.1 until any such claim or
allegation has been resolved or a final, nonappealable order of the
applicable Governmental Authority has has been entered against a covered
person.
15.8.2 ASBESTOS CLEAN-UP. In the event that the property of any
Covered Person contains asbestos or asbestos-containing materials ("ACM"),
Borrower shall develop and implement, as soon as reasonably possible, an
Operations and Maintenance Program (as contemplated by EPA guidance
document entitled "Managing Asbestos in Place; A Building Owner's Guide to
Operations and Maintenance Programs for Asbestos-Containing Materials")
for managing in place the ACM, and deliver a true, correct and complete
copy of such Operations and Maintenance Program to Lender. In the event
that the asbestos survey done in connection with developing the Operations
and Maintenance Program reveals ACM which, due to its condition, location
or planned building renovation, is recommended to be encapsulated or
removed, Borrower shall promptly cause the same to be encapsulated or
removed and disposed of offsite, in either case by a licensed and
experienced asbestos contractor, all in accordance with applicable state,
federal and local Laws. Upon completion of any such encapsulation or
removal, Borrower shall deliver to Lender a certificate in such form as
then customarily available signed by the consultant overseeing the
activity certifying to Lender that the work has been completed in
compliance with all applicable Laws regarding notification, encapsulation,
removal and disposal and that no airborne fibers beyond permissible
exposure limits remain on site. All costs of such inspection, testing and
remedial actions shall be paid by Borrower.
15.9 PENSION BENEFIT PLANS. Each Covered Person (1) shall notify Lender
promptly of the establishment of any Pension Benefit Plan by such Covered
Person, or by any ERISA
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Affiliate, which is subject to the requirements of ERISA; (2) shall maintain
each such Pension Benefit Plan without terminating or amending the same if such
termination or amendment would result in any liability to such Covered Person
or ERISA Affiliate under Title IV of ERISA or any increase in current liability
for the plan year that such Covered Person or ERISA Affiliate is required to
provide security to such Pension Benefit Plan under Section 401(a)(29) of the
Code; (3) shall at all times make prompt payments or contributions to meet the
minimum funding standards set forth in ERISA and the Code with respect to any
Pension Benefit Plan maintained by such Covered Person or ERISA Affiliate to
which such standards are applicable; (4) shall promptly after the filing
thereof furnish to Lender a copy of any report required to be filed pursuant to
Section 103 of ERISA in connection with each such Pension Benefit Plan for each
Pension Benefit Plan year; (5) promptly after the receipt thereof, shall
furnish to Lender a copy of any reports and notices which it or an ERISA
Affiliate receives from PBGC (that are not general mailings to all Pension
Benefit Plan sponsors); (6) shall notify Lender within thirty days of any
Reportable Event as that term is defined in Section 4043 of ERISA or any
circumstances arising in connection with any Pension Benefit Plan maintained by
such Covered Person or ERISA Affiliate which might constitute grounds for the
termination thereof by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Pension Benefit
Plan; and (7) promptly furnish such additional information concerning any such
Pension Benefit Plan as Lender may from time to time request.
15.10 NOTICE OF MATERIAL EVENTS. Borrower shall, promptly upon any
Responsible Officer of Borrower obtaining knowledge or notice thereof, give
notice to Lender of any (i) breach of any of the covenants in Section 15 or 16;
(ii) Default or Event of Default; (iii) the commencement of any Material
Proceeding; and (iv) any loss of or damage to any assets of a Covered Person
or institution of any proceeding for the condemnation or other taking of any of
the assets of a Covered Person, to the extent that such loss, damage or
proceeding is likely to give rise to Insurance/Condemnation Proceeds in excess
of $100,000 or to result in a Material Adverse Effect. In addition,
15.10.1 Borrower shall furnish to Lender from time to time all
information which Lender reasonably requests with respect to the
status of any Material Proceeding.
15.10.2 Borrower shall within thirty (30) days inform Lender of its
receipt of, and deliver to Lender a copy of, any material (a) notice that
any violation of any FDA Law, Environmental Law or Employment Law may have
been committed or is about to be committed by any Covered Person, (b)
notice that any administrative or judicial complaint or order has been
filed or is about to be filed against any Covered Person alleging
violations of any FDA Law, Environmental Law or Employment Law or
requiring such Covered Person to take any action in connection with the
release of any Hazardous Waste into the environment, (c) notice from a
federal, state, or local governmental agency or private party alleging
that a Covered Person may be liable or responsible for costs associated
with a response to or cleanup of a release of Hazardous Waste into the
environment or any damages caused thereby, (d) notice that a Covered
Person is subject to federal, state or local investigation regarding the
improper transportation, storage, disposal, generation or release into the
environment of any Hazardous Waste, or (e) notice that any properties or
assets of a Covered
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Person are subject to a Security Interest in favor of any Governmental
Authority for any liability under any Environmental Law or damages arising
from or costs incurred by such governmental entity in response to a
release of Hazardous Waste into the environment.
15.10.3 Borrower shall within 30 days after they occur deliver to
Lender notice of the following events: (i) the failure of any Covered
Person or ERISA Affiliate to make any required installment or any other
required payment to any Pension Benefit Plan in sufficient amount to
comply with ERISA and the Code on or before the due date for such
installment or payment; (ii) the occurrence of any Reportable Event,
"prohibited transaction" or "accumulated funding deficiency" (as those
terms are defined in ERISA) with respect to any Pension Benefit Plan
maintained or contributed to by a Covered Person or ERISA Affiliate; (iii)
receipt by a Covered Person or ERISA Affiliate of any notice from a
Multi-employer Plan regarding the imposition of withdrawal liability; and
(iv) receipt by a Covered Person or ERISA Affiliate of any notice of the
institution, or a Covered Person's expectancy of the institution, of any
proceeding or receipt by such Covered Person or ERISA Affiliate of any
notice of the taking, or such Covered Person's expectancy of the taking,
of any other action which may result in the termination of any Pension
Benefit Plan maintained or contributed to by such Covered Person or ERISA
Affiliate, or the withdrawal or partial withdrawal by a Covered Person or
ERISA Affiliate from any Pension Benefit Plan, and the filing or receipt
by a Covered Person or ERISA Affiliate of any such notice and filing or
receipt of all subsequent reports or notices under ERISA with or from the
Internal Revenue Service, the PBGC, or the DOL relating to the same; and,
in addition to such notice, deliver to Lender a certificate of the
President or Chief Financial Officer of Borrower, setting forth details as
to such events and the action that the affected Covered Person or ERISA
Affiliate proposes to take with respect thereto. For purposes of this
Section, Borrower and any ERISA Affiliate shall be deemed to know all
facts known by the Administrator of any Plan of which Borrower or any
ERISA Affiliate is the plan sponsor.
15.10.4 Borrower shall, within ten days after it occurs, deliver to
Lender notice of any default or event of default, or the occurrence of any
event which would with the passage of time, giving of notice or otherwise,
constitute a default or event of default with respect to any of the
Permitted Indebtedness.
15.10.5 Borrower shall, immediately after becoming aware thereof,
deliver notice to Lender of the assertion by the holder of any capital
stock of Borrower or any Indebtedness in the outstanding principal amount
in excess of $250,000 that a default exists with respect thereto or that
Borrower is not in compliance iwth the terms thereof, or that Borrower is
not in compliance with the terms thereof, or of the threat or commencement
by such holder of any enforcement action because of such asserted default
or noncompliance.
15.10.6 Borrower shall, immediately after becoming aware thereof,
deliver notice to Lender of any pending or threatened strike, work
stoppage, material unfair labor practice claim or other material labor
dispute affecting Borrower.
15.10.7 Borrower shall deliver notice to Lender of any change in
Borrower's name, state of incorporation, form of organization, trade names
or styles under which
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Borrower will sell Inventory or create Accounts, or to which instruments
in payment of Accounts may be made payable, at least 30 days prior to such
change.
15.10.8 Borrower shall, immediately after becoming aware thereof,
deliver notice to Lender of any material adverse change in Borrower's
property, business, operations or condition (financial or otherwise).
15.10.9 Borrower shall, immediately after becoming aware thereof,
deliver notice to Lender of any violation of any Law applicable to
Borrower or its properties which may have a Material Adverse Effect.
15.11 BORROWING OFFICER. Borrower shall keep on file with Lender at all
times an appropriate instrument naming each Borrowing Officer.
15.12 MAINTENANCE OF LIENS OF SECURITY DOCUMENTS.
15.12.1 PRESERVATION AND PERFECTION OF LIENS. Borrower shall
promptly, upon the reasonable request of Lender and at Borrower's expense,
execute, acknowledge and deliver, or cause the execution, acknowledgment
and delivery of, and thereafter file or record in the appropriate
governmental office, any document or instrument supplementing or confirming
the Security Documents or otherwise deemed necessary by Lender to create,
preserve or perfect any Security Interest purported to be created by the
Security Documents or to fully consummate the transactions contemplated by
the Loan Documents. The foregoing actions by Borrower shall include,
without limitation, (a) filing financing or continuation statements, and
amendments thereof, in form and substance satisfactory to Lender; (b)
delivering to Lender the original certificates of title for motor vehicles
with Lender's security interest properly endorsed thereon; (c) delivering
to Lender the originals of all instruments, documents and chattel paper,
and all other Collateral of which Lender determines it should have physical
possession in order to perfect and protect Lender's security interest
therein, duly endorsed or assigned to Lender without restriction; (d)
delivering to Lender warehouse receipts covering any portion of the
Collateral located in warehouses and for which warehouse receipts are
issued; (e) transferring Inventory to warehouses designated by Lender; (f)
placing notations on Borrower's books of account to disclose Lender's
security interest; and (g) delivering to Lender all letters of credit on
which Borrower is named beneficiary.
15.12.2 COLLATERAL HELD BY WAREHOUSEMAN, BAILEE, ETC. If any
Collateral valued in excess of $100,000 is at any time in the possession
or control of a warehouseman, bailee or any of Borrower's agents or
processors, then Borrower shall notify Lender thereof and shall notify
such Person of Lender's security interest in such Collateral and, upon
Lender's request, instruct such Person to hold all such Collateral for
Lender's account subject to Lender's instructions. If at any time any
Collateral is located on any premises that are not owned by Borrower, then
Borrower shall obtain written waivers, in form and substance reasonably
satisfactory to Lender, of all present and future Security Interests to
which the owner or lessor or any mortgagee of such premises may be
entitled to assert against the Collateral.
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15.12.3 COMPLIANCE WITH TERMS OF SECURITY DOCUMENTS. Borrower shall
comply with all of the terms, conditions and covenants in the Security
Documents to which Borrower is a party.
15.13 ACCOUNTING SYSTEM. Each Covered Person shall maintain a system of
accounting established and administered in accordance with GAAP. Without
limiting the generality of the foregoing:
15.13.1 ACCOUNT RECORDS. Each Covered Person shall maintain a
record of Accounts at its principal place of business that itemize each
Account of such Covered Person and describe the names and addresses of the
Account Debtors on such Accounts, relevant invoice numbers, shipping dates
and due dates, collection histories, and agings of such Accounts.
15.13.2 INVENTORY RECORDS. Each Covered Person shall maintain a
perpetual inventory at its principal place of business that records, by
type, quality and quantity, its cost therefor, withdrawals therefrom and
additions thereto, and listing any returns, rejections, repossessions,
stoppages in transit, losses, damages or destruction of or to such
Inventory.
15.14 FINANCIAL STATEMENTS. Borrower shall deliver to Lender:
15.14.1 ANNUAL FINANCIAL STATEMENTS. Within 120 days after the close
of each Fiscal Year, year-end consolidated and consolidating Financial
Statements of Borrower and its Subsidiaries, containing an audit report
without qualification by Xxxxxx Xxxxxxxx LLP or another independent
certified public accounting firm selected by Borrower and reasonably
satisfactory to Lender, and accompanied by (a) a Compliance Certificate of
the Chief Financial Officer of Borrower, and (b) a certificate of the
independent certified public accountants that examined such Financial
Statements to the effect that they have reviewed and are familiar with
this Agreement and that, in examining such Financial Statements, they did
not become aware of any fact or condition which then constituted a Default
or Event of Default, except for those, if any, described in reasonable
detail in such certificate.
15.14.2 MONTHLY FINANCIAL STATEMENTS. Within 30 days after the end
of each month, unaudited consolidated Financial Statements of Borrower for
each of the months not covered by the latest year-end Financial
Statements.
15.14.3 QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the
end of each fiscal quarter of Borrower, unaudited consolidated and
consolidating Financial Statements of Borrower and its Subsidiaries for
the quarters not covered by the latest year-end Financial Statements, in
each case accompanied by a Compliance Certificate of the Chief Financial
Officer of Borrower.
15.14.4 ANNUAL PROJECTIONS. Not more than 90 days and not less
than 30 days prior to the beginning of each Fiscal Year, projected
statements of income and expense, and statements of cash flow for Borrower
as at the end of and for each quarter of such Fiscal Year and the next
succeeding Fiscal Year.
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15.14.5 CAPITAL EXPENDITURES REPORT. Within 45 days after the end
of each fiscal quarter, a report of the Capital Expenditures of Borrower
for such quarter and a statement of cash flow for Borrower for the period
from the beginning of the then current Fiscal Year to the end of such
quarter, prepared in accordance with GAAP applied consistently with the
audited Financial Statements required to be delivered pursuant to Section
15.14.1.
Each Compliance Certificate shall be in the form of Exhibit 15.14, shall contain
detailed calculations of the financial measurements referred to in Section 17
for the relevant periods, and shall contain statements by the signing officer
to the effect that, except as explained in reasonable detail in such Compliance
Certificate, (i) the attached Financial Statements are complete and correct in
all material respects (subject, in the case of Financial Statements other than
annual, to normal year-end audit adjustments) and have been prepared in
accordance with GAAP applied consistently throughout the periods covered
thereby and with prior periods (except as disclosed therein), (ii) all of the
representations and warranties of Borrower contained in this Agreement and
other Loan Documents are true and correct as of the date such certification is
given as if made on such date, and (iii) there exists no Default which is
continuing that has not been waived in writing by Lender and no Event of
Default has occurred that has not been waived in writing by Lender. If any
Compliance Certificate delivered to Lender discloses that a representation or
warranty is not true and correct, or that a Default or Event of Default has
occurred that has not been waived in writing by Lender, such Compliance
Certificate shall set forth what action Borrower has taken or proposes to take
with respect thereto.
15.15 OTHER FINANCIAL INFORMATION. Borrower shall deliver to Lender:
15.15.1 AGINGS REPORT. Within fifteen days after the end of each
Fiscal Year, a report of the aging of all Accounts of Borrower in such
reasonable detail as Lender may require.
15.15.2 OTHER REPORTS OR INFORMATION CONCERNING ACCOUNTS. Such other
reports or information as Lender may reasonably request from time to time,
in a form and with such specificity as is reasonably satisfactory to
Lender, concerning Accounts reflected in the Periodic Reports, Periodic
Summaries or any other documents provided to Lender. Such copies shall
include, if specifically requested by Lender, copies of all invoices
prepared in connection with such Accounts.
15.15.3 STOCKHOLDER AND SEC REPORTS. Promptly after their
preparation, copies of any and all (i) proxy statements, financial
statements and reports which Borrower makes available to its stockholders,
and (ii) reports, registration statements and prospectuses, if any, filed
by Borrower with any securities exchange or the Securities and Exchange
Commission or any Governmental Authority succeeding to any of its
functions.
15.15.4 PENSION BENEFIT PLAN REPORTS. Promptly after filing with
the PBGC, DOL or IRS, a copy of each annual report or other filing or
notice filed with respect to each Pension Benefit Plan of any Covered
Person or any ERISA Affiliate.
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15.15.5 FEDERAL TAX RETURNS. Promptly after filing with the IRS,
a copy of each income tax return filed by Borrower.
15.16 ANNUAL REVIEW OF ACCOUNTS. Borrower shall conduct an annual review
of its Accounts, bad debt reserves and collection histories of Account Debtors
and promptly following such review provide Lender with a report of such
review in a form and with such specificity as may be reasonably satisfactory to
Lender.
15.17 INVENTORY AUDITS. Borrower shall annually conduct an audit of its
Inventory based on its interim cycle counts and promptly following the
completion of such audit provide Lender with a report thereof in a form and
with such specificity as may be reasonably satisfactory to Lender, including
the value of such Inventory (on a consistent basis and valued at the lower of
cost or market value).
15.18 OTHER INFORMATION. Upon the written request of Lender, Borrower
shall promptly deliver to Lender such other information about the business,
operations, revenues, financial condition, property, or business prospects of
Borrower as Lender may, from time to time, reasonably request.
15.19 AUDITS BY LENDER. Lender or Persons authorized by and acting on
behalf of Lender may at any time during normal business hours audit the books
and records of each Covered Person from time to time upon reasonable notice to
such Covered Person, and in the course thereof may make copies or abstracts of
such books and records and discuss the affairs, finances and books and records
of such Covered Person with its accountants and officers. Each Covered Person
shall cooperate with Lender and such Persons in the conduct of such audits and
shall deliver to Lender any instrument necessary for Lender to obtain records
from any service bureau maintaining records for such Covered Person. If a
Default or an Event of Default has occurred and is continuing, Borrower shall
reimburse Lender for all costs and expenses incurred by it in conducting such
audit.
15.20 VERIFICATION OF ACCOUNTS. Lender shall (with the consent of
Borrower which consent shall not be unreasonably withheld) have the right at
any time, after first giving either oral or written notice to Borrower, to
verify the validity and amount of any Account and any other matter relating to
an Account, by communicating in writing or orally directly with the Account
Debtor or any Person who represents or Lender believes represents the Account
Debtor. Notwithstanding the foregoing, if a Default is continuing or an Event
of Default has occurred and is continuing, no consent of Borrower shall be
required.
15.21 APPRAISALS OF COLLATERAL. Whenever a Default or Event of Default
exists, Borrower shall at its expense and upon Lender's request, provide Lender
with appraisals or updates thereof of any or all of the Collateral from an
appraiser acceptable to Lender, and prepared on a basis satisfactory to Lender.
15.22 ACCESS TO OFFICERS AND AUDITORS. Each Covered Person shall permit
Persons authorized by Lender to discuss the affairs, finances and accounts of
such Covered Person with its officers as often as Lender may reasonably
request, and such Covered Person shall direct such officers to cooperate with
Lender and make full disclosure to Lender of those matters that they may deem
relevant to the continuing ability of Borrower timely to pay and
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perform the Loan Obligations. Upon an Event of Default, each Covered Person
shall permit Persons authorized by Lender to discuss the affairs, finances and
accounts of such Covered Person with its officers and independent auditors as
often as Lender may reasonably request, and such Covered Person shall direct
such officers and independent auditors (at Borrower's cost) to cooperate with
Lender and make full disclosure to Lender of those matters that they may deem
relevant to the continuing ability of Borrower timely to pay and perform the
Loan Obligations.
15.23 PROFORMAS FOR PERMITTED ACQUISITIONS. Borrower shall, prior to
making any Permitted Acquisition, prepare and furnish to Lender proforma
financial statements for the Person to be acquired, or the Surviving Person if
the acquisition is to be by merger, demonstrating to the satisfaction of Lender
that none of the covenants in Section 17 will be violated as a consequence of
such acquisition or with the passage of time thereafter. Such proforma
financial statements shall contain forecasted balance sheets, income
statements, statements of cash flows and such other reports and disclosures,
and shall cover such forecast periods, as the Lender may in its sole discretion
require.
15.24 RATE PROTECTION AGREEMENTS. On or prior to the expiration or
termination of the Rate Agreement, if any, in effect on the date hereof,
Borrower shall secure a replacement Rate Agreement with a counterparty whose
rating with Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc. is
equal to or better than the counterparty in the initial agreement, with terms
substantially identical to those contained in the Rate Agreement in effect on
the date hereof with respect to a notional principal amount equal to or greater
than the amount of the Revolving Commitment, extending through the Ultimate
Term Maturity Date. Borrower shall take all actions necessary to provide that
the replacement Rate Agreement will be pledged as security for the Loans in
the same manner as the Rate Agreement in effect on the date hereof.
15.25 ACQUISITION AGREEMENT. Borrower shall fully perform all of its
obligations under the Acquisition Agreement, and shall enforce all of its
rights and remedies thereunder as it deems appropriate in its reasonable
business judgment; provided, however, that Borrower shall not take any action
or fail to take any action which would result in a waiver or other loss of any
material right or remedy of Borrower thereunder. Without limiting the
generality of the foregoing, Borrower shall take all action necessary or
appropriate to permit, and shall not take any action which would have any
adverse effect upon, the full enforcement of all indemnification rights under
the Acquisition Agreement. Borrower shall not, without Lender's prior written
consent (which shall not be withheld unreasonably), modify, amend, supplement,
compromise, satisfy, release or discharge the Acquisition Agreement, any
collateral securing the same, any Person liable directly or indirectly with
respect thereto, or any agreement relating to the Acquisition Agreement or the
collateral therefor. Borrower shall notify Lender in writing promptly after
Borrower becomes aware thereof, of any event or fact which could give rise to a
claim by it for indemnification under the Acquisition Agreement, and shall
diligently pursue such right and report to Lender on all further developments
with respect thereto. Borrower shall remit directly to Lender, for application
to the Revolving Loan in such order as Lender determines, all amounts received
by Borrower as indemnification or otherwise pursuant to the Acquisition
Agreement. If Borrower fails after Lender's demand to pursue diligently any
right under the Acquisition Agreement, or if an Event of Default exists, then
Lender may directly enforce such right in its own or Borrower's name and may
enter into such
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settlements or other agreements with respect thereto as Lender determines.
Notwithstanding the foregoing, Borrower shall at all times remain liable to
observe and perform all of its duties and obligations under the Acquisition
Agreement, and Lender's exercise of any of its rights with respect to the
Collateral shall not release Borrower from any of such duties or obligations.
Lender shall not be obligated to perform or fulfill any of Borrower's duties or
obligations under the Acquisition Agreement or to make any payment thereunder,
or to make any inquiry as to the sufficiency of any payment or property
received by it thereunder or the sufficiency of performance by any party
thereunder, or to present or file any claim, or to take any action to collect
or enforce any performance or payment of any amounts, or any delivery of any
property.
15.26 EARTH CITY FACILITY. Borrower shall complete construction of the
expansion of the Earth City Facility in accordance with the plans,
specifications, budget, construction schedule and Contracts relating thereto.
Such expansion of the Earth City Facility shall be substantially complete
(subject to minor punch-list items) no later than October 31, 1996. The Earth
City Facility shall be constructed within the boundaries of Real Property
Collateral in accordance with all Laws, free of all claims or Encumbrances for
labor or material.
15.27 FURTHER ASSURANCES. Borrower shall execute and deliver, or cause to
be executed and delivered, to Lender such documents and agreements, and shall
take or cause to be taken such actions, as Lender may from time to time request
to carry out the terms and conditions of this Agreement and the other Loan
Documents.
15.28 DATE-DOWN ENDORSEMENT. Following completion of the construction
arising out of the expansion of the Earth City Facility, Borrower shall provide
Lender with an endorsement to Lender's Policy of Title Insurance issued by such
title company on the Earth City Facility which insures the priority of Lender's
Security Interest against all mechanics liens arising out of the expansion of
the Earth City Facility.
16 NEGATIVE COVENANTS.
Borrower covenants and agrees that, while any of the Commitments remain in
effect or any of the Loan Obligations are owing to Lender by Borrower, Borrower
shall not, directly or indirectly, do any of the following, or permit any
Covered Person to do any of the following, without the prior written permission
of Lender:
16.1 INVESTMENTS. Make any Investments in any other Person except the
following ("Permitted Investments"):
16.1.1 Investments in (i) interest-bearing United States government
obligations; (ii) certificates of deposit issued by Lender; (iii) prime
commercial paper rated A1 by Standard and Poor's Corporation or Prime P1
by Xxxxx'x Investor Service, Inc.; or (iv) agreements with Lender
involving the sale and guarantied repurchase of United States government
securities.
16.1.2 Accounts arising in the ordinary course of business and
payable in accordance with Borrower's customary trade terms.
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16.1.3 Investments existing on the Execution Date and disclosed in
Exhibit 13.
16.1.4 Notes or securities received by Borrower in settlement of
Indebtedness of other Persons to Borrower that was incurred in the
ordinary course of Borrower's business.
16.1.5 Notes, not exceeding $150,000 in the aggregate, received by
Borrower in partial payment of Indebtedness to Borrower resulting from
the sale of assets.
16.1.6 Investments in the securities of Borrowers' competitors and
suppliers; provided that such Investment shall not exceed 100 shares in
each such competitor or supplier.
16.1.7 Investments in a european joint venture to be created to
manufacture and distribute Borrowers' products; provided that such
Investment shall not exceed $400,000.
16.2 INDEBTEDNESS. Create, incur, assume or allow to exist any
Indebtedness of any kind or description, except the following (the "Permitted
Indebtedness"):
16.2.1 Indebtedness to trade creditors in the ordinary course of
business, to the extent that it is not overdue past the original due date
by more than 90 days or being diligently contested in good faith and by
appropriate proceedings and for which adequate book reserves in accordance
with GAAP are maintained.
16.2.2 The Loan Obligations.
16.2.3 Indebtedness secured by Permitted Liens.
16.2.4 Indebtedness arising out of leases of office equipment or
furniture in the ordinary course of business.
16.2.5 Indebtedness arising out of leases of equipment and
machinery in the ordinary course of business, subject to the provisions
of Section 17.1.
16.3 PREPAYMENTS. Voluntarily prepay any Indebtedness other than (a) the
Loan Obligations in accordance with their terms, and (b) trade payables in the
ordinary course of business.
16.4 INDIRECT OBLIGATIONS. Create, incur, assume or allow to exist any
Indirect Obligations except Indirect Obligations existing on the Execution Date
and disclosed on Exhibit 13.
16.5 LIENS. Create, incur, assume or allow to exist any Security
Interest upon all or any part of its property, real or personal, now owned or
hereafter acquired, except the following (the "Permitted Liens"):
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16.5.1 Security Interests for taxes, assessments or governmental
charges not delinquent or being diligently contested in good faith and by
appropriate proceedings and for which adequate book reserves in accordance
with GAAP are maintained.
16.5.2 Security Interests arising out of deposits in connection
with workmen's compensation, unemployment insurance, old age pensions, or
other social security or retirement benefits legislation.
16.5.3 Deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds, and other obligations of like
nature arising in the ordinary course of business.
16.5.4 Security Interests imposed by any Law, such as mechanics',
workmen's, materialmen's, landlords', carriers', or other like Security
Interests arising in the ordinary course of business which secure payment
of obligations which are not past due or which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP are maintained on Borrower's books.
16.5.5 Purchase money liens securing payment of the purchase price
of capital assets acquired by Borrower after the Execution Date in an
aggregate amount not to exceed $250,000 at any one time.
16.5.6 Security Interests existing on the Execution Date and
disclosed on Exhibit 13.
16.6 ACQUISITIONS. Acquire stock or other equity interest in a Person,
or acquire any asset of a Person except asset acquisitions by Borrower in the
ordinary course of its business that are not otherwise prohibited herein and
Permitted Investments.
16.7 BAILMENTS; CONSIGNMENTS; WAREHOUSING. Store any Inventory valued in
excess of $100,000 with a bailee, warehouseman, consignee or pursuant to an
express or implied agreement establishing a bailment or consignment of
Inventory or similar arrangement, unless Lender has received a written
acknowledgment reasonably satisfactory to Lender from the third party involved
which acknowledges the prior perfected lien and security interest of Lender in
such Inventory.
16.8 DISPOSAL OF PROPERTY. Sell, transfer, exchange, lease or otherwise
dispose of its assets, except (i) sales of Inventory in the ordinary course of
business and (ii) sales of capital assets approved by Lender (including but not
limited to Dental's Maryland Heights Facility and Lorvic's St. Louis Facility
if the net proceeds thereof are used for prepayment of the Term Loan as
required by Section 5.3.2.2. Notwithstanding the foregoing, Borrower may sell,
transfer or otherwise dispose of obsolete or unusable equipment having an
orderly liquidation value no greater than $50,000 individually, and $200,000 in
the aggregate in any Fiscal Quarter provided that (a) if such sale, transfer or
disposition is effected without replacement of such equipment, or if such
equipment is replaced by equipment leased by Borrower or by equipment purchased
by Borrower subject to a Security Interest, then Borrower shall deliver all of
the cash proceeds of any such sale, transfer or other disposition to Lender,
which
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proceeds shall be applied as a prepayment of the Term Loan as required by
Section 5.3.2.2 or (b) if such sale, transfer or other disposition is made in
connection with the purchase by Borrower of replacement equipment (other than
equipment subject to a Security Interest), then Borrower shall use the proceeds
of any such sale, transfer or other disposition to finance the purchase by
Borrower of such replacement equipment and shall deliver to Lender written
evidence of the use of the proceeds for such purchase. All replacement
equipment purchased by Borrower shall be free and clear of all Security
Interests and Encumbrances, except for Permitted Liens.
16.9 DISTRIBUTIONS; CAPITAL CHANGE. Directly or indirectly declare or
make, or incur any liability to make, any Distribution, including any cash
dividend or acquisition or redemption of any outstanding stock or retirement or
prepayment of any Securities before their regularly scheduled maturity dates,
make any loans or advances to shareholders of Borrower or make any change in
its capital structure which could have a Material Adverse Effect; provided,
however, that, absent a Default that is continuing or the occurrence of an
Event of Default, Borrower may repurchase shares of capital stock in Borrower
held by employees of Borrower, excluding Xxxxxx X. Xxxxxxxx and Xxxxxxx X.
Xxxxxxxx (except pursuant to that certain Stock Plan dated September 16, 1992
with respect to the repurchase of Securities held by Xxxxxxx X. Xxxxxxxx by
Borrower for the limited purpose set forth therein), provided that such
repurchases shall not exceed $500,000 per Fiscal Year in the aggregate (except
pursuant to that certain Employment and Noncompetition Agreement between
Denticator and Xxxx X. Xxxxxxx, dated as of July 22, 1996).
16.10 CHANGE OF CONTROL. Merge or consolidate with or into another
Person, or permit any Person or Group to become the record or beneficial owner,
directly or indirectly, of securities representing thirty percent (30%) or more
of the voting power of Borrower's then outstanding securities having the power
to vote, or acquiring the power to elect a majority of the Board of Directors
of Borrower; provided, however that Xxxxxx X. Xxxxxxxx may transfer all or some
of his respective shares in Borrower by gift or testamentary transfer to any
member of his immediate family, to a trust for the benefit of any member of his
immediate family, or to a trust for which he is treated as the owner of the
trust's assets under the Code.
16.11 CHANGE OF BUSINESS. Engage in any business other than substantially
as conducted on the Effective Date.
16.12 TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
transaction or arrangement, including without limitation, the purchase, sale or
exchange of property of any kind or the rendering of any service, with any
Affiliate, or make any loans or advances to any Affiliate; provided, however,
that if no Event of Default has occurred and is continuing, Borrower may engage
in the foregoing transactions in the ordinary course of business and pursuant
to the reasonable requirements of its business and on fair and reasonable terms
substantially as favorable to it as those which it could obtain in a comparable
arm's-length transaction with a non-Affiliate.
16.13 DEBT PAYMENTS AND MATERIAL AGREEMENTS. Default upon or fail to pay
any Indebtedness for money borrowed as the same matures, or breach, violate or
be in default under any Material Agreement.
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16.14 Management COMPENSATION. Pay, directly or indirectly, compensation
of more than $1,000,000 per Fiscal Year, in the aggregate, to Borrowers'
management which shall be deemed to be Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Nemencik, Sr., Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxxx and their
replacements, except that the grant of Borrower's stock to Xxxx X. Xxxxxxx in
accordance with that certain Employment and Noncompetition Agreement between
Denticator and Xxxx X. Xxxxxxx, dated as of July 22, 1996, shall not be
included within the $1,000,000 per Fiscal Year limit.
16.15 CONFLICTING AGREEMENTS. Enter into any agreement, that would, if
fully complied with by it, result in a Default or Event of Default either
immediately or upon the elapsing of time.
16.16 BANK ACCOUNTS. Maintain any deposit accounts at institutions other
than Lender except zero or pegged balance payroll accounts and other accounts
with balances not exceeding $100,000 as described in Exhibit 13.41.
16.17 INVESTMENT BANKING AND FINDER'S FEES. Pay or agree to pay, or
reimburse any other party with respect to, any investment banking or similar
or related fee, underwriter's fee, finder's fee, or broker's fee to any Person
in connection with this Agreement or the Acquisition Agreement.
16.18 SALE AND LEASEBACK TRANSACTIONS. Enter into any arrangement with
any Person providing for Borrower to lease or rent property that Borrower has
or will sell or otherwise transfer to such Person.
16.19 NEW SUBSIDIARIES. Organize, create or acquire any Subsidiary,
except that upstream mergers of a subsidiary into its parent shall be allowed.
16.20 FISCAL YEAR. Change its Fiscal Year from a Fiscal Year ending on
the last day of December.
16.21 TRANSACTIONS HAVING MATERIAL ADVERSE EFFECT. Enter into any
transaction which has a Material Adverse Effect.
17 FINANCIAL COVENANTS.
17.1 CAPITAL EXPENDITURES. Borrower shall not make Capital Expenditures
in any of the periods specified in the table below that in the aggregate exceed
the amount specified for such period:
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--------------------------------------------------------------------------------
Period Maximum Capital Expenditure
--------------------------------------------------------------------------------
Effective Date through December 31, $1,100,000 per Fiscal Year plus
1997 expenditures made in connection with the
expansion of the Earth City Facility, not
exceeding $2,600,000 in the aggregate
--------------------------------------------------------------------------------
January 1, 1998 - Ultimate Revolving
Maturity Date $1,100,000 per Fiscal Year
--------------------------------------------------------------------------------
17.2 CAPITAL LEASES. Become obligated as lessee under any Capital Leases
except Capital Leases existing on the Execution Date and disclosed on Exhibit
13 and Capital Leases entered into by Borrower after the Execution Date for
capital assets whose aggregate cost if purchased would not (when aggregated
with other Capital Expenditures of Borrower in the same period) exceed the
limits for Capital Expenditures prescribed in Section 17.1.
17.3 OPERATING LEASE OBLIGATIONS. Become obligated as lessee under any
Operating Lease except Operating Leases existing on the Execution Date and
disclosed on Exhibit 13 and Operating Leases entered into by Borrower after the
Execution Date if, after giving effect thereto, the aggregate amount of all
rentals payable by Borrower in respect of all Operating Leases does not exceed
$100,000 in any Fiscal Year. For purposes hereof, the term "rentals" means all
payments due from the lessee or sublessee under an Operating Lease, including,
without limitation, basic rent, percentage rent, property taxes, utility or
maintenance costs and insurance premiums.
17.4 MINIMUM EBITDA. Borrowers' EBITDA calculated as a twelve month
period ending at the end of each month during the fiscal periods specified in
the table below, shall not be less than the amount specified for such period:
--------------------------------------------------------------------------------
Period Minimum EBITDA
--------------------------------------------------------------------------------
July 1, 1996 - December 31, 1996 $7,000,000
January 1, 1997 - June 30, 1997 $7,500,000
July 1, 1997 - December 31, 1997 $8,000,000
January 1, 1988 - December 1, 1999 $9,000,000
--------------------------------------------------------------------------------
17.5 MINIMUM FIXED CHARGE COVERAGE. The ratio of Borrowers' EBITDA to
Fixed Charges for each twelve month period, calculated as of the last day of
each month, shall not be less than 1.1 to 1.0.
17.6 MINIMUM INTEREST COVERAGE. The ratio of Borrowers' EBIT to Interest
Expense for each twelve month period, calculated as of the last day of each
such month, shall not be less than 4.5 to 1.0.
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17.7 MINIMUM NET WORTH. Borrowers' Net Worth shall at no time during any
fiscal period specified in the table below be less than the amount specified
for such period:
Period Minimum Net Worth
-------------------------------------------------------------------------------
Effective Date to December 31, 1996 $ 9,500,000
January 1, 1997 to December 31, 1997 $12,000,000
January 1, 1998 to December 31, 1998 $16,000,000
January 1, 1999 to December 1, 1999 $20,000,000
-------------------------------------------------------------------------------
As used in this Section 17,
"Fixed Charges" means, for any period of calculation, the sum of (i)
interest expense, (ii) the sum of all scheduled principal payments on the
long term Indebtedness of Borrower, (iii) federal, state and local income
tax expense, and (iv) Capital Expenditures (excluding expenditures made
in connection with the expansion of the Earth City Facility).
"Net Worth" means "net worth" as determined in accordance with GAAP.
"EBITDA" means, for any period of calculation, an amount equal to the sum
of (i) Net Income (prior to any LIFO accounting adjustments), (ii)
federal, state and local income tax expense, (iii) interest expense, (iv)
depreciation and amortization expense, (v) losses on the sale or other
disposition of assets, (vi) that portion of the stock bonus to be paid
Xxxx X. Xxxxxxx in stock of Innovations pursuant to that certain
Employment and Noncompetition Agreement between Denticator and Xxxx X.
Xxxxxxx, dated as of July 22, 1996, not including any cash redemption of
such stock, and (vii) extraordinary losses, minus (a) gains on the sale
or other disposition of assets, and (b) extraordinary gains, all
calculated for such period. "EBIT" means EBITDA less insert (iv), (v),
(vi) and (vii).
All other capitalized terms used in this Section 17 shall have their meanings
and shall be calculated under GAAP. Upon the agreement of each of the parties
hereto, measurements of financial covenants may be made on a rolling four
Fiscal Quarter basis instead of the rolling twelve Fiscal Month basis otherwise
specified herein.
18 DEFAULT.
18.1 EVENTS OF DEFAULT. Any one or more of the following shall
constitute an event of default (an "Event of Default") under this Agreement:
18.1.1 FAILURE TO PAY PRINCIPAL OR INTEREST. Failure of Borrower
to pay any principal of the Loans or interest accrued thereon when due.
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18.1.2 FAILURE TO PAY OTHER AMOUNTS OWED TO LENDER. Failure of
Borrower to pay any of the Loan Obligations (other than principal of the
Loans or interest accrued thereon) within 5 days after the date when due.
18.1.3 FAILURE TO PAY AMOUNTS OWED TO OTHER PERSONS. Failure of
any Covered Person to pay any Indebtedness of such Covered Person over
$10,000 to Persons other than Lender which continues unwaived beyond any
applicable grace period specified in the documents evidencing such
Indebtedness or is being diligently contested in good faith and by
appropriate proceedings and for which adequate book reserves in accordance
with GAAP are maintained.
18.1.4 REPRESENTATIONS OR WARRANTIES. Any representation or
warranty made by Borrower in this Agreement, or any statement or
representation made in any certificate, report, opinion or other document
delivered pursuant to this Agreement, is discovered to have been false and
results in or obscures a Material Adverse Effect.
18.1.5 CERTAIN COVENANTS. Failure of any Covered Person to comply
with the covenants in Sections 15.14, 15.19, 15.23, 16.1 through 16.8,
and 17.
18.1.6 OTHER COVENANTS. Failure of any Covered Person to comply
with of any of the terms or provisions of any of the Loan Documents
applicable to it (other than a failure which constitutes an Event of
Default under any of Sections 18.1.1 through 18.1.5) which is not remedied
or waived in writing by Lender within 20 days after the initial occurrence
of such failure; provided, however, that no such grace period shall apply,
and an Event of Default shall exist promptly upon such failure to comply,
if such failure may not, in Lender's reasonable determination, be cured by
Borrower during such 20 day period.
18.1.7 ACCELERATION OF OTHER INDEBTEDNESS. Any Obligation of a
Covered Person (other than the Loan Obligations) for the payment of
borrowed money becomes or is declared to be due and payable or required to
be prepaid (other than by a regularly scheduled prepayment) prior to the
original maturity thereof.
18.1.8 DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any
default or event of default under any agreement to which a Covered Person
is a party (other than the Loan Documents), which default or breach
continues unwaived beyond any applicable grace period provided therein and
likely would have a Material Adverse Effect.
18.1.9 BANKRUPTCY; INSOLVENCY; ETC. A Covered Person (i) fails to
pay, or admits in writing its inability to pay, its debts as they become
due, or otherwise becomes insolvent (however evidenced); (ii) makes an
assignment for the benefit of creditors; (iii) files a petition in
bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to
any tribunal for any receiver or any trustee of such Covered Person or any
substantial part of its property; (iv) commences any proceeding relating
to such Covered Person under any reorganization, arrangement, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; (v) has commenced against it any such
proceeding which remains
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undismissed for a period of thirty (30) days, or by any act indicates its
consent to, approval of, or acquiescence in any such proceeding or the
appointment of any receiver of or any trustee for it or of any substantial
part of its property, or allows any such receivership or trusteeship to
continue undischarged for a period of thirty (30) days; or (vi) takes any
corporate action to authorize any of the foregoing.
18.1.10 JUDGMENTS; ATTACHMENT; ETC. Any one or more judgments or
orders is entered against a Covered Person or any attachment or other levy
is made against the property of a Covered Person with respect to a claim
or claims involving in the aggregate liabilities (not paid or fully
covered by insurance, less the amount of reasonable deductibles in effect
on the Execution Date) in excess of [$25,000], becomes final and
non-appealable or if timely appealed is not fully bonded and collection
thereof stayed pending the appeal.
18.1.11 PENSION BENEFIT PLAN TERMINATION, ETC. Any Pension Benefit
Plan termination by the PBGC or the appointment by the appropriate United
States District Court of a trustee to administer any Pension Benefit Plan
or to liquidate any Pension Benefit Plan; or any event which constitutes
grounds either for the termination of any Pension Benefit Plan by PBGC or
for the appointment by the appropriate United States District Court of a
trustee to administer or liquidate any Pension Benefit Plan shall have
occurred and be continuing for thirty (30) days after Borrower has notice
of any such event; or any voluntary termination of any Pension Benefit
Plan which is a defined benefit pension plan as defined in Section 3(35)
of ERISA while such defined benefit pension plan has an accumulated
funding deficiency, unless Lender has been notified of such intent to
voluntarily terminate such plan and has given its consent and agreed that
such event shall not constitute a Default; or the plan administrator of
any Pension Benefit Plan applies under Section 412(d) of the Code for a
waiver of the minimum funding standards of Section 412(1) of the Code and
Lender believes that the substantial business hardship upon which the
application for such waiver is based could subject any Covered Person or
ERISA Affiliate to a liability in excess of $25,000.
18.1.12 LIQUIDATION OR DISSOLUTION. A Covered Person files a
certificate of dissolution under applicable state law or is liquidated or
dissolved or suspends or terminates the operation of its business, or has
commenced against it any action or proceeding for its liquidation or
dissolution or the winding up of its business, or takes any corporate
action in furtherance thereof; provided, however, that such actions in
furtherance of a plan whereby the assets of such Covered Person are
acquired by another Covered Person shall not be an Event of Default.
18.1.13 SEIZURE OF ASSETS. All or any part of the property of
Borrower is nationalized, expropriated or condemned, seized or otherwise
appropriated, or custody or control of such property or of Borrower shall
be assumed by any Governmental Authority or any court of competent
jurisdiction at the instance of any Governmental Authority, except where
contested in good faith by proper proceedings diligently pursued where a
stay of enforcement is in effect.
18.1.14 RACKETEERING PROCEEDING. There is filed against Borrower
any civil or criminal action, suit or proceeding under any federal or
state racketeering statute
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(including, without limitation, the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding is not
dismissed within 120 days and could result in the confiscation or
forfeiture of any material portion of the Collateral.
18.1.15 LOAN DOCUMENTS; LIENS. For any reason other than the
failure of Lender to take any action available to it to maintain
perfection of the Security Interests created in favor of Lender pursuant
to the Loan Documents, any Loan Document ceases to be in full force and
effect or any Security Interest with respect to any portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid,
perfected and prior to all other Security Interests (other than the
Permitted Liens) or is terminated, revoked or declared void or invalid.
18.1.16 LOSS TO COLLATERAL. Any loss, theft, damage or destruction
of any item or items of Collateral occurs which (i) materially and
adversely affects the operation of Borrower's business; or (ii) is
material in amount and is not adequately covered by insurance.
18.1.17 MATERIAL ADVERSE EVENT. There occurs any material adverse
change in Borrower's property, business, operation, or condition
(financial or otherwise), or there occurs any event which has or will have
a Material Adverse Effect.
18.2 CROSS-DEFAULT. Any Event of Default under this Agreement will
constitute an event of default under any other agreement of Borrower with
Lender and under any evidence of Indebtedness of Borrower held by Lender,
whether or not such is an event of default specified therein.
18.3 RIGHTS AND REMEDIES IN THE EVENT OF DEFAULT.
18.3.1 TERMINATION OF COMMITMENTS. Upon an Event of Default
described in Section 18.1.9, the Commitments shall be deemed canceled.
Upon any other Event of Default, and at any time thereafter, Lender may
cancel the Commitments. Such cancellation may be without demand or notice
of any kind, which Borrower expressly waives.
18.3.2 ACCELERATION. Upon an Event of Default described in Section
18.1.9, all of the outstanding Loan Obligations shall automatically become
immediately due and payable. Upon any other Event of Default, and at any
time thereafter, Lender may declare all of the outstanding Loan
Obligations immediately due and payable. Such acceleration may be without
demand or notice of any kind, which Borrower expressly waives.
18.3.3 RIGHT OF SET-OFF. Upon the occurrence of any Event of
Default and at any time and from time to time thereafter, Lender is hereby
authorized, without notice to Borrower (any such notice being expressly
waived by Borrower), to set off and apply against the Loan Obligations any
and all deposits (general or special, time or demand, provisional or
final) at any time held, or any other Indebtedness at any time owing by
Lender to or for the credit or the account of Borrower, irrespective of
whether or not Lender shall have made any demand under this Agreement or
the Notes
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and although such Loan Obligations may be unmatured. The rights of Lender
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which Lender may otherwise have.
18.3.4 NOTICE TO ACCOUNT DEBTORS. During the continuance of any
Default that is not waived in writing by Lender and after the occurrence
of any Event of Default that is not waived in writing by Lender, Lender
may, without prior notice to Borrower, notify any or all Account Debtors
that the Accounts have been assigned to Lender and that Lender has a
security interest therein, and Bank may direct, or Borrower, at Bank's
request, shall direct, any or all Account Debtors to make all payments
upon the Accounts directly to Bank. Bank shall furnish Borrower with a
copy of any such notice issued by Bank promptly after notifying such
Account Debtors.
18.3.5 ENTRY UPON PREMISES AND ACCESS TO INFORMATION. Upon an
Event of Default and acceleration of the Loan Obligations as provided
herein, and at any time thereafter: Lender may (i) enter upon the
premises leased or owned by Borrower where Collateral is located (or is
believed to be located) without any obligation to pay rent to Borrower, or
any other place or places where Collateral is believed to be located, (ii)
render Collateral usable or saleable, (iii) remove Collateral therefrom to
the premises of Lender or any agent of Lender for such time as Lender may
desire in order effectively to collect or liquidate Collateral; (iv) take
possession of, and make copies and abstracts of, Borrower's original books
and records, obtain access to Borrower's data processing equipment,
computer hardware and software relating to any of the Collateral and use
all of the foregoing and the information contained therein in any manner
Lender deems appropriate in connection with the exercise of Lender's
rights; and (v) notify postal authorities to change the address for
delivery of Borrower's mail to an address designated by Lender and to
receive, open and process all mail addressed to Borrower.
18.3.6 SECURED PARTY RIGHTS. Upon an Event of Default and
acceleration of the Loan Obligations as provided herein, and at any time
and from time to time thereafter:
18.3.6.1 Lender may exercise any or all of its rights under
the Security Documents, as a secured party under the UCC and any
other applicable Law; and
18.3.6.2 Lender may sell or otherwise dispose of Collateral
at public or private sale in a commercially reasonable manner (ten
days notice of a public or private sale being deemed and agreed by
Borrower to be reasonable), which sale Lender may postpone from time
to time by announcement at the time and place of sale stated in the
notice of sale or by announcement at any adjourned sale without
being required to give a new notice of sale, all as Lender deems
advisable, for cash or credit; provided, however, that Lender may
become the purchaser at any such sale if permissible under
applicable Law and Lender may, in lieu of actual payment of the
purchase price, offset the amount thereof against Borrower's
obligations owing to Lender; and Borrower agrees that
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Lender has no obligation to preserve rights to Collateral against
prior parties or to marshal any Collateral for the benefit of any
Person;
In connection with the advertising for sale, selling or otherwise
realizing upon any of the Collateral securing the obligations of Borrower
to Lender, Lender may use and is hereby granted a license to use, without
charge or liability to Lender therefor, any of Borrower's labels, trade
names, trademarks, trade secrets, service marks, patents, patent
applications, licenses, certificates of authority, advertising materials,
or any of Borrower's other properties or interests in properties of
similar nature, to the extent that such use thereof is not prohibited by
agreements under which Borrower has rights therein, and all of Borrower's
rights under license, franchise and similar agreements shall inure to
Lender's benefit.
18.3.7 MISCELLANEOUS. After the occurrence of an Event of Default
and at any time thereafter, Lender may exercise any other rights and
remedies available to Lender under the Loan Documents or otherwise
available to Lender at law or in equity.
18.3.8 APPLICATION OF FUNDS. Any funds received by Lender with
respect to the Loan Obligations after any acceleration, including but not
limited to proceeds of Collateral, shall be applied as follows: (i)
first, to reimburse Lender for any amounts due to Lender under Sections
19.8 and 19.9; (ii) second, to the payment of accrued and unpaid fees due
hereunder and all other amounts due hereunder (other than the Loans and
interest accrued thereon); (iii) third, to the payment of interest accrued
on the Loans; (iv) fourth, to the payment of the Loans, in such order as
Lender determines in its sole discretion; and (v) fifth, to the payment of
the other Loan Obligations. Any remaining amounts shall be paid to
Borrower or such other Persons as shall be legally entitled thereto.
18.4 BORROWER'S OBLIGATIONS. Upon the occurrence of an Event of Default,
Borrower shall, if Lender so requests, assemble the Collateral and make it
available to Lender at a place or places to be designated by Lender, reasonably
convenient to Borrower.
18.5 LIMITATION OF LIABILITY; WAIVER. Lender shall not be liable to
Borrower as a result of any commercially reasonable possession, repossession,
collection or sale by Lender of Collateral; and Borrower hereby waives all
rights of redemption from any such sale and the benefit of all valuation,
appraisal and exemption laws. If Lender seeks to take possession of any of the
Collateral by replevin or other court process, Borrower hereby irrevocably
waives (i) the posting of any bonds, surety and security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession, (ii) any demand for possession of the Collateral prior to the
commencement of any suit or action to recover possession thereof, (iii) any
requirement that Lender retain possession and not dispose of any Collateral
until after trial or final judgment, and (iv) to the extent permitted by
applicable law, all rights to notice and hearing prior to the exercise by
Lender of Lender's right to repossess the Collateral without judicial process
or to replevy, attach or levy upon the Collateral without notice or hearing.
Lender shall have no obligation to preserve rights to the Collateral or to
xxxxxxxx any Collateral for the benefit of any Person.
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18.6 NOTICE. Any notice of intended action required to be given by
Lender, if given as provided in Section 19.1 at least 10 days prior to such
proposed action, shall be effective and constitute reasonable and fair notice
to Borrower.
19 MISCELLANEOUS.
19.1 NOTICES. All notices, consents, requests and demands to or upon the
respective parties hereto shall be in writing, and shall be deemed to have been
given or made when delivered in person to those Persons listed on the signature
pages hereof or when deposited in the United States mail, postage prepaid, or,
in the case of telegraphic notice, or the overnight courier services, when
delivered to the telegraph company or overnight courier service, or in the case
of telex or telecopy notice, when sent, verification received, in each case
addressed as set forth on the signature pages hereof, or such other address as
either party may designate by notice to the other in accordance with the terms
of this paragraph. No notice given to or demand made on Borrower by Lender in
any instance shall entitle Borrower to notice or demand in any other instance.
19.2 RIGHT TO CURE. Lender may from time to time, in its sole discretion
(but shall have no obligation to do so), for Borrower's account and at
Borrower's expense, pay (or make a Revolving Advance to pay) any amount or do
any act required of Borrower hereunder or requested by Lender to preserve,
protect, maintain or enforce the Loan Obligations, the Collateral or Lender's
Security Interests thereon, and which Borrower fails to pay or do, including,
without limitation, payment of any judgment against Borrower, insurance
premium, taxes or assessments, warehouse charge, finishing or processing
charge, landlord's claim, and any other Security Interest upon or with respect
to the Collateral. All payments that Lender makes pursuant to this Section and
all out-of-pocket costs and expenses that Lender pays or incurs in connection
with any action taken by it hereunder shall be a part of the Loan Obligations,
the repayment of which shall be secured by the Collateral. Any payment made or
other action taken by Lender pursuant to this Section shall be without
prejudice to any right to assert an Event of Default hereunder and to pursue
Lender's other rights and remedies with respect thereto.
19.3 AMENDMENTS, WAIVERS AND CONSENTS. No amendment to, waiver of, or
departure from full compliance with any provision of this Agreement, or of any
of the other Loan Documents, or consent to any departure by Borrower herefrom
or therefrom, shall be effective unless it is in writing and signed by
authorized officers of Borrower and the Lender; provided, however, that any
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No failure by Lender to exercise, and no delay by
Lender in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by Lender
of any right, remedy, power or privilege hereunder preclude any other exercise
thereof, or the exercise of any other right, remedy, power or privilege.
19.4 RIGHTS NOT EXCLUSIVE. Every right granted to Lender hereunder or
under any other Loan Document or allowed to it at law or in equity shall be
deemed cumulative and may be exercised from time to time.
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19.5 SURVIVAL OF AGREEMENTS. All covenants and agreements made herein
and in the other Loan Documents shall survive the execution and delivery of
this Agreement, the Notes and other Loan Documents and the making of every
Advance. All agreements, obligations and liabilities of Borrower under this
Agreement concerning the payment of money to Lender, including but not limited
to Borrower's obligations under Sections 19.8 and 19.9, but excluding the
obligation to repay the Loans and interest accrued thereon, shall survive the
repayment in full of the Loans and interest accrued thereon, the return of the
Notes to Borrower and the termination of the Commitments. Subject to Section 8
of this Agreement, upon the payment in full of all Loan Obligations and the
termination of the Commitments, all Security Documents shall be deemed
terminated and shall be released of record by Lender.
19.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and all future holders of the Notes
and their respective successors and assigns, except that Borrower may not
assign, delegate or transfer any of its rights or obligations under this
Agreement without the prior written consent of Lender. With respect to
Borrower's successors and assigns, such successors and assigns shall include,
without limitation, any receiver, trustee or debtor-in-possession of or for
Borrower. Lender shall have the right to assign its rights and to delegate its
obligations under the Loan Documents to any affiliate of such Lender that
assumes its obligations to make Loans to Borrower subject to the terms and
conditions herein, but such assignment and delegation should not relieve the
assigning and delegating Lender from its obligations hereunder. Lender shall
have the right to assign its rights under the Loan Documents to any Federal
Reserve Bank, but without delegation of such Lender's obligations thereunder.
19.7 PARTICIPATIONS. Lender may in the ordinary course of its commercial
banking business and in accordance with applicable law grant participations to
one or more banks or other financial institutions in any of the Loans. For
this purpose, the Lender may disclose to a potential or actual participant any
information supplied to Lender by or on behalf of Borrower. Borrower hereby
acknowledges and agrees that every such participant has the same right of
set-off as does Lender under Section 18.3.3; provided, however, that all amounts
received by any such participant through the exercise of the right of set-off
in excess of its share of Loans as a participant shall be remitted to Lender.
19.8 PAYMENT OF EXPENSES. Borrower agrees to pay or reimburse Lender for
its costs and expenses incurred in connection with Lender's due diligence
review, the negotiation and preparation of the Commitment Letter and the Loan
Documents, and the perfection of Lender's liens and security interests in the
Collateral, including but not limited to mortgagee's title insurance premiums,
recording and filing fees, appraisal fees, environmental consultant fees,
Lender's customary fees for honoring drawings on letters of credit, and all
reasonable attorneys' fees and all actual attorney's expenses advanced
(including but not limited to expenses for lien searches and filing charges,
facsimile and other electronic data transmissions, long-distance telephone
charges, courier and delivery charges and photocopying charges).
Notwithstanding the foregoing, Borrower shall pay the first $25,000 of all such
costs and expenses, Lender shall pay the next $10,000 and Borrower and Lender
shall share equally all such costs thereafter. Further, if at any time or times
hereafter Lender engages legal counsel for advice or other representation to
enforce the rights of Lender against Borrower under the Loan Documents or in
connection with amendment, supplement, waiver, consent or subsequent closing
relating to any of the Loan Documents at the request
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of Borrower or as a consequence of a Default or Event or Default, then all
reasonable fees and all expenses advanced of such legal counsel and all
litigation costs, including costs incurred as a consequence of any proceedings
involving Borrower under the federal bankruptcy Code (if any) shall constitute
a part of the Loan Obligations and be payable by Borrower on demand.
19.9 INDEMNITY. Borrower shall pay, indemnify and hold harmless Lender
and its directors, officers, employees, agents, and representatives (the
"Indemnified Parties") for, from and against, and promptly to reimburse the
Indemnified Parties for, any and all claims, damages, liabilities, losses,
costs and expenses (including, without limitations, reasonable attorneys' fees
and expenses and amounts paid in settlement) (the "Indemnified Liabilities")
incurred, paid or sustained by the Indemnified Parties in connection with,
arising out of, based upon or otherwise involving or resulting from any
threatened, pending or completed action, suit, investigation or other
proceeding by, against or otherwise involving the Indemnified Parties and in
any way dealing with, relating to or otherwise involving this Agreement, any of
the other Loan Documents, or any transaction contemplated hereby or thereby
(each a "Triggering Event"); provided, however, that Borrower shall have no
obligation to indemnify the Indemnified parties hereunder with respect to any
Indemnified Liabilities arising from the gross negligence, bad faith or willful
misconduct of any of the Indemnified Parties. Borrower shall pay, indemnify and
hold harmless the Indemnified Parties for, from and against, and promptly
reimburse the Indemnified Parties for, any and all claims, damages,
liabilities, losses, costs and expenses (including, without limitations,
reasonable attorneys' and consultant fees and expenses, investigation and
laboratory fees, removal, remedial, response and corrective action costs, and
amounts paid in settlement) incurred, paid or sustained by the Indemnified
Parties as a result of the manufacture, storage, transportation, release or
disposal of any Hazardous Waste on, from, over or affecting any of the
Collateral or any of the assets, properties, or operations of any Covered
Person or any predecessor in interest, directly or indirectly. Borrower shall
pay, indemnify and hold harmless the Indemnified Parties for, from and against,
and shall promptly reimburse the Indemnified Parties for, any and all claims,
damages, liabilities, losses, costs and expenses (including, without
limitations, reasonable attorneys' fees and expenses and amounts paid in
settlement) incurred, paid or sustained by the Indemnified Parties, arising out
of or relating to the Acquisition Agreement or Lender's enforcement of any of
its rights with respect thereto. The obligations of Borrower under this
Section 19.9 shall survive the termination of the Commitments, the expiration of
letters of credit issued by Lender for the account of Borrower, the payment and
satisfaction of all of the Loan Obligations, and the release of the Collateral.
To the extent that any of the indemnities set forth in this Section may be
unenforceable because it is violative of any law or public policy, Borrower
shall pay the maximum portion which it is permitted to pay under applicable
law.
19.10 CHANGES IN ACCOUNTING PRINCIPLES. If Borrower, at the end of its
Fiscal Year and with the concurrence of its independent certified public
accountants, changes the method of valuing the Inventory of Borrower, or if any
other changes in accounting principles from those used in the preparation of
any of the Financial Statements are required by or result from the promulgation
of principles, rules, regulations, guidelines, pronouncements or opinions by
the Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or bodies with similar functions),
and any of such changes result in a change in the method of calculation of, or
affect the results of such calculation of, any of the financial covenants,
standards or terms found herein, then the parties hereto agree
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to enter into and diligently pursue negotiations in order to amend such
financial covenants, standards or terms so as to equitably reflect such
changes, with the desired result that the criteria for evaluating the financial
condition and results of operations of Borrower shall be the same after such
changes as if such changes had not been made; provided, however, that until
such changes are made, all financial covenants herein and all the provisions
hereof which contemplate financial calculation hereunder shall remain in full
force and effect.
19.11 LOAN RECORDS. The date and amount of all Advances to Borrower and
payments of amounts due from Borrower under the Loan Documents will be recorded
in the records that Lender normally maintains for such types of transactions.
The failure to record, or any error in recording, any of the foregoing shall
not, however, affect the obligation of Borrower to repay the Loans and other
amounts payable under the Loan Documents. Borrower shall have the burden of
proving that Lender's records are not correct. Borrower agrees that Lender's
books and records showing the Loan Obligations and the transactions pursuant to
this Agreement shall be admissible in any action or proceeding arising
therefrom, and shall constitute prima facie proof thereof, irrespective of
whether any Loan Obligation is also evidenced by a promissory note or other
instrument. Lender will provide to Borrower a monthly statement of Advances,
payments, and other transactions pursuant to this Agreement. Such statement
shall be deemed correct, accurate and binding on Borrower and an account stated
(except for reversals and reapplications of payments as provided in Sections 7
and 8 and corrections of errors discovered by Lender), unless Borrower notifies
Lender in writing to the contrary within thirty (30) days after such statement
is rendered. In the event a timely written notice of objections is given by
Borrower, only the items to which exception is expressly made will be
considered to be disputed by Borrower.
19.12 DRAFTING/NEGOTIATION. Borrower and Lender represent one to the
other that in the negotiation and drafting of this Agreement they have been
represented by and have relied upon the advice of counsel of their choice.
Borrower and Lender affirm that their counsel have both had substantial roles
in the drafting and negotiation of this Agreement and, therefore, this
Agreement shall be deemed drafted by both Borrower and Lender, and the rule of
construction to the effect that any ambiguities are to be resolved against the
drafter shall not be employed in the interpretation of this Agreement.
19.13 OTHER SECURITY AND GUARANTIES. Lender may, without notice or demand
and without affecting Borrower's obligations hereunder, from time to time: (a)
take from any Person and hold collateral (other than the Collateral) for the
payment of all or any part of the Loan Obligations and exchange, enforce and
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Loan Obligations
and release or substitute any such endorser or guarantor, or any Person who has
given any Security Interest in any other collateral as security for the payment
of all or any part of the Loan Obligations, or any other Person in any way
obligated to pay all or any part of the Loan Obligations.
19.14 SEVERABILITY. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or lack of authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction unless the ineffectiveness of such
provision would result in
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such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.
19.15 COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of separate counterparts, and all such counterparts taken
together shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one counterpart signed by the party to be charged.
19.16 GOVERNING LAW; NO THIRD PARTY RIGHTS. THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF MISSOURI APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE. This Agreement is solely for the
benefit of the parties hereto and their respective successors and assigns, and
no other Person shall have any right, benefit, priority or interest under, or
because of the existence of, this Agreement.
19.17 CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT
SENTENCE, BORROWER AND LENDER HEREBY AGREE TO THE EXCLUSIVE JURISDICTION OF THE
FEDERAL COURT OF THE EASTERN DISTRICT OF MISSOURI AND THE STATE COURTS OF
MISSOURI LOCATED IN THE CITY OF ST. LOUIS, MISSOURI, AND WAIVE ANY OBJECTION
BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED
THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING THE RELATIONSHIP BETWEEN LENDER
AND BORROWER OR THE CONDUCT OF EITHER PARTY IN CONNECTION WITH THIS AGREEMENT
OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE.
NOTWITHSTANDING THE FOREGOING: (1) LENDER SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN ANY COURTS OF ANY
OTHER JURISDICTION LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON
THE COLLATERAL, REAL ESTATE OR OTHER SECURITY FOR THE LOAN OBLIGATIONS, AND (2)
EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS
DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE THOSE JURISDICTIONS.
19.18 SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO BORROWER AT ITS
ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO
DEPOSITED IN THE U.S. MAILS, OR, AT LENDER'S OPTION, BY SERVICE UPON XXXXXX
XXXXXXXX WHICH BORROWER IRREVOCABLY APPOINTS AS BORROWER'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF MISSOURI. LENDER
SHALL PROMPTLY FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED UPON SAID AGENT
TO BORROWER AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF. BORROWER
HEREBY CONSENTS TO SERVICE OF PROCESS AS AFORESAID. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
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19.19 CAPTIONS. Section captions and the Table of Contents are for
convenience only and shall not affect the interpretation or construction of
this Agreement or the other Loan Documents.
19.20 INCORPORATION BY REFERENCE. All of the terms of the other Loan
Documents are incorporated in and made a part of this Agreement by this
reference.
19.21 STATUTORY NOTICE. The following notice is given pursuant to Section
432.045 of the Missouri Revised Statutes; nothing contained in such notice
shall be deemed to limit or modify the terms of the Loan Documents:
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) 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.
YOUNG INNOVATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------
Title: President
--------------------------
YOUNG DENTAL MANUFACTURING COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------
Title: President
--------------------------
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LORVIC HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------
Title: President
--------------------------
THE LORVIC CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------
Title: Vice President
--------------------------
DENTICATOR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
---------------------------
Title: Vice President
--------------------------
Notice Address (for all of the Borrowers):
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxxxx & Xxxxxxx X. Xxxxxxxxx
FAX # (000) 000-0000
TEL # (000) 000-0000
With a copy to:
Armstrong, Teasdale, Schlafly & Xxxxx
Xxx Xxxxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Xx., Esq.
FAX # (000) 000-0000
TEL # (000) 000-0000
52
54
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By: /s/ T. Halls
-----------------------------
Name: Xxxxxxx X. Halls
---------------------------
Title: Vice President
--------------------------
Notice Address:
Xxx Xxxxxxx'x Xxxxx, 00xx Xxxxx
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxxxxx
FAX # (000) 000-0000
TEL # (000) 000-0000
-and-
00 Xxxx Xxxxxxxx
Xxxxxxx Xxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Halls
FAX # (000) 000-0000
TEL # (000) 000-0000
With a copy to:
Xxxxx, Rice & Xxxxxxxx, X.X.
000 X. Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
FAX # (000) 000-0000
TEL # (000) 000-0000
53
55
EXHIBIT 10.1.2
--------------
REAL PROPERTY COLLATERAL
------------------------
Lot 1 of the Resubdivision of Xxx 0 xx Xxx 0000 (xxxxxxx) xx XXXXX XXXX XXXX 2,
according to the plat thereof recorded in Plat Book 264 Page 89 of the
St. Louis County Records.
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxx XX 00000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A tract of land being Xxx 0 xx Xxxxxx Xxxxxxxxxx Xxxx-Xxxxxxx Xx. 0, a
Subdivision recorded in Plat Book 127 Page 57 of the St. Louis County Records
and being described as follows:
Beginning at the Northwest corner of said Lot 3, said corner is also on the
South line of Frost Avenue, 50.00 feet wide; thence along said South line of
Frost Avenue, South 82 degrees 43 minutes East 154.04 feet, to a point of
curvature; thence along a curve to the right, said curve has a radius of 20.00
feet and an arc distance of 31.37 feet to a point of tangency, said point is
also on the West line of 50.00 feet wide private street known as Jonas Place;
thence along said West line of Jonas Place, South 7 degrees 09 minutes 39
seconds West 200.04 feet to the Southeast corner of said Lot 3; thence North 82
degrees 43 minutes West 174.00 feet to the Southwest corner of said Lot 3;
thence North 7 degrees 09 minutes 39 seconds East 220.00 feet to the point of
beginning.
0000 Xxxxx Xxxxxx
Xx. Xxxxx XX 00000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The South part of Lot 12 of WEST PORT INDUSTRIAL SUBDIVISION 2ND ADDITION, a
Subdivision in the County of St. Louis, Missouri, according to the plat thereof
recorded in Plat Book 107 Page 98 and 99 of the St. Louis County Records,
fronting 100 feet on the East line of Northline Industrial Boulevard by a depth
Eastwardly of 224.58 feet on the South line and 242.38 feet on the North line
to the East line of said lot upon which it has a width of 101.57 feet.
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxxx XX 00000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
Brownsville
-----------
LAND: 3.472 Acre tract out of Share 22 of the Xxxxxxxx Xxxxx Xxxxx in
Cameron County, Texas; said 3.472 Acre tract being more
particularly located and described as follows:
FROM the intersection of the Centerline of Cameron County Drainage Dist. No. 1
and the Common line of Shares 19 and 22 of the Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx
County, Texas;
THENCE North 4 degrees-05'-03" East along the common line of Shares 19 and 22
same being the centerline of Xxxxxxx Line Road (F.M. Hwy. No. 1847) a distance
of 180.92 feet for the east corner and PLACE OF BEGINNING of this tract;
THENCE along a line perpendicularly 155 feet North of and parallel to the
centerline of Cameron County Drainage District No. 1, North 54 degrees-51'-57"
West a distance of 827.42 feet for the Westernmost corner of this tract;
THENCE South 85 degrees-54'-57" East, a distance of 708.88 feet to the
centerline of Xxxxxxx Line Road (F.M. Hwy. 1847) same being the common line of
Share 19 and 22 for the Northeast corner of this tract;
THENCE South 4 degrees-05'-03" West along the common line of Shares 19 and 22
same being the centerline of Xxxxxxx Line Road (F.M. Hwy. No. 1847) a distance
of 426.75 feet for the Southeast corner and PLACE OF BEGINNING of this tract;
CONTAINING 3.472 Acres of which 0.472 acre is within Xxxxxxx Line Road (F.M.
Hwy. No. 1847) Right-of Way.
Land is in Cameron County Texas and is known and numbered as 0000 Xxxxxxx Xxxx
Xx., Xxxxxxxxxxx, Xxxxx
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rancho Cordova, California
--------------------------
The right, title and interest of Denticator International, Inc., a Missouri
corporation, in and to that certain Lease dated as of February 23, 1991,
between Denticator International, Inc., a California corporation (predecessor
in interest to Denticator International, Inc., a Missouri corporation) with
respect to the real property described therein, as such Lease may have been
amended from time to time.
The Leased Premises are situated in Sacramento County, California and is known
and numbered as 00000 Xxxxxxx Xxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000.
57
EXHIBIT 10.1.3
--------------
Intellectual Property
---------------------
THE LORVIC CORPORATION PATENTS AND PATENT APPLICATIONS
Application Application Patent Issue
Title Country Number Date Number Date
----- ------- ----------- ----------- ------ -----
Method for Etching Dental U.S. 235,809 2/19/81 4,376,673 03/15/83
Porcelain
Dispenser for Dental Sealant U.S. 156,840 6/5/80 4,343,418 08/10/82
Dental Cavity Xxxxxx U.S. 140,322 4/14/80 4,308,062 12/29/81
Composition
THE LORVIC CORPORATION TRADEMARKS AND TRADEMARK APPLICATIONS
XXXX REG. NO. APP. DATE FIRST USE COUNTRY
---- -------- --------- --------- -------
KARIDIUM 651,397 8/3/53 RENEWED U.S.
KARIDIUM 115,174 Canada
ENDO-VAC 1,036,150 10/18/74 REGISTERED U.S.
ENDO-VAC 213,155 Canada
TRACE 970,256 7/26/72 RENEWED U.S.
RENEW 1,736,023 2/14/92 REGISTERED U.S.
MAGNASIL 1,385,724 8/8/85 REGISTERED U.S.
SURG-O-VAC 1,807,305 3/17/93 REGISTERED U.S.
NYCLAVE 1,804,305 3/17/93 REGISTERED U.S.
DH/NYCLAVE 1,804,306 3/17/93 REGISTERED U.S.
58
YOUNG DENTAL MANUFACTURING COMPANY PATENTS AND PATENT APPLICATIONS
Application Application Patent Issue
Title Country Number Date Number Date
----- ------- ----------- ----------- ------ -----
TATTOOING U.S. 673,277 11/20/1984 4,582,060 04/15/1986
TOOL AND
NEEDLE
ASSEMBLY FOR
USE THEREIN
DENTAL U.S. 477,748 02/09/1990 5,094,615 03/10/1992
POLISHING HEAD
AND METHOD
CONTROL UNIT U.S. 477,609 02/09/1990 5,158,455 10/27/1992
FOR A SCALER
AND A POLISHER
CONTROL FOR U.S. 619,037 11/28/1990 5,186,625 02/16/1993
DENTAL AIR-
POLISHER
DISPOSABLE U.S. 613,366 11/15/1990 5,156,547 10/20/1992
PROPHYLAXIS
ANGLE AND
METHOD OF
ASSEMBLING IT
AUTOCLAVABLE U.S. 619,039 11/28/1990 5,090,904 02/25/1992
AIR POLISHER
HANDPIECE
COUPLING U.S. 259,987 05/04/1981 4406621 09/27/1983
ENSEMBLE FOR
DENTAL
HANDPIECE
DENTAL U.S. 963,132 10/19/1992 5,328,369 07/12/1994
PROPHYLAXIS
ANGLE
DENTAL U.S. 281,765 07/28/1994 5,484,284 01/16/1996
PROPHYLAXIS
TOOL AND
ANGLE USING IT
DENTAL U.S. 224,502 04/07/1994 5,423,679 06/13/1995
PROPHYLAXIS
ANGLE
DENTAL U.S. 224,263 04/07/1994 5,503,555 04/02/1996
PROPHYLAXIS
ANGLE
59
AUTOCLAVABLE U.S. 281,452 07/27/1994 5,501,596 03/26/1996
DENTAL SCALER
HANDPIECE
CLEANING CUP U.S. 953,474 10/23/1978 4,365,956 12/28/1982
LOCKING U.S. 184,751 09/08/1980 4,310,310 01/12/1982
ASSEMBLY FOR
DENTAL
HANDPIECE
DENTIFRICE U.S. 90,025 10/31/1979 4,308,252 12/29/1981
COMPOSITION
SEALING DENTAL U.S. 59,525 07/23/1979 4,292,027 09/29/1981
COLLET
DENTAL U.S. 953,473 10/23/1978 4,253,832 03/03/1981
HANDPIECE
SEALING DENTAL U.S. 59,525 07/23/1979 4,292,027 09/29/1981
COLLET
DENTAL U.S. Unfiled
HANDPIECE WITH
SPEED REDUCING
GEAR
A LUBRICATING U.S. Unfiled
SYSTEM FOR
PROPHY CUP
HIGH SPEED U.S. 639401/08 04/29/1996 Pending
DISPOSABLE
TURBINE
HANDPIECE
DENTAL PCT PCT/US94/ 02/10/1994 Pending
PROPHYLAXIS 01551
ANGLE
DENTAL TAIWAN Unfiled
PROPHYLAXIS (ROC)
ANGLE
DENTAL U.S. 387252/08 02/13/1995 Pending
COMPOUND
APPLICATOR
DENTAL TOOL U.S. 315963/08 09/30/1994 Allowed
XXXXX
DENTAL TOOL PCT PCT/US95/ 09/26/1995 Pending
XXXXX 12300
60
DENTAL TOOL TAIWAN 84109757 09/18/1995 Pending
XXXXX (ROC)
DISPOSABLE U.S. 273182/08 07/11/94 Allowed
DENTAL
PROPHYLAXIS
CONTRA-ANGLE,
METHOD OF
MAKING IT, AND
DRIVE GEAR FOR
USE THEREIN
PERMANENTLY U.S. 525825/08 08/16/1995 Pending
LUBRICATED
DENTAL
PROPHYLAXIS
ANGLE
DISPOSABLE U.S. 632906/08 04/16/1996 Pending
PROPHYLAXIS
ANGLE
DENTAL U.S. 041555/29 07/18/1995 Allowed
PROPHYLAXIS
ANGLE
MOLDED U.S. Unfiled
PLASTIC DENTAL
XXXXXX XXXXX
XXXXXX X.X. 000000/00 08/16/1995 Pending
PROPHYLAXIS
ANGLE WITH
SEAL
PROTECTOR
DENTAL TOOL U.S. Unfiled
XXXXX
XXXXX WITH A U.S. 648817/08 05/16/1996 Pending
PUSH BUTTON
RELEASE FOR A
DENTAL/
MEDICAL DEVICE
PROPHYLAXIS U.S. 619836/08 03/19/1996 Pending
TOOL WITH
SEALING
ELEMENTS
DENTAL U.S. 626178/08 03/29/1996 Pending
PROPHYLAXIS
ANGLE
61
DENTAL U.S. Unfiled
PROPHYLAXIS
CUP
YOUNG DENTAL MANUFACTURING COMPANY TRADEMARKS AND TRADEMARK
APPLICATIONS
XXXX REG. NO. APP. DATE FIRST USE COUNTRY
---- -------- --------- --------- -------
CARE-FREE 1,940,092 01/30/1995 REGISTERED UNITED STATES
XXXX 1,278,833 08/20/1982 REGISTERED UNITED STATES
EZ-PAK 1,940,093 01/30/1995 REGISTERED UNITED STATES
GEL-TIN 1,277,813 01/17/1983 REGISTERED UNITED STATES
PRO CARE 1,192,694 08/31/1979 REGISTERED UNITED STATES
PROLASTIC 1,127,392 07/07/1978 REGISTERED XXXXXX XXXXXX
XXXX-XX 000,000 00/00/0000 XXXXXXX XXXXXX XXXXXX
TRIPLE SEAL 1,172,125 01/10/1980 REGISTERED UNITED STATES
TS2 1,734,607 03/09/1992 REGISTERED UNITED STATES
DENTICATOR INTERNATIONAL, INC. PATENTS AND PATENT APPLICATIONS
Application Application Patent Issue
Title Country Number Date Number Date
----- ------- ----------- ----------- ------ -----
Right Angled U.S. 621,809 12/4/90 5,120,220 06/09/92
Dental
Handpiece
Compressed Air U.S. 08/479,929 6/7/95
Driven
Disposable
Hand Tool
Having a Rotor
with Radially
Moving Vanes
62
PCT
Application,
PCT/US/96/__,
__, filed
__________,
1996
corresponding
to Application
Serial No.
08/479,929
Disposable Application 02/09/96
Prophy WO9606265
Handpiece-
Turbine
Disposable Application 02/29/96
Prophy WO9605779
Handpiece
Disposable U.S. 08/294,736 08/18/95
Dental
Prophylaxis
Handpiece
PCT
Application
PCT/US/95/10
687, filed
August 18,
1995, which
corresponds to
Application
Serial Xx.
00/000,000
Xxxxxxxxxx X.X. 000,000 9/9/92 5,374,189 12/20/94
Prophy Angle
Drive
Mechanism
Dental prophy U.S. 100,629 7/30/93 5,405,265 04/11/95
cup
Dental prophy U.S. 18,271 1/31/94 D368,523 04/02/96
cup
Dental prophy U.S. 18,185 2/1/94 D368,964 04/16/96
cup
Dental U.S. 29/017,187 1/6/94
Prophylaxis
Cup
63
Fluid Reaction U.S. 08/294,621 8/23/94
Device
PCT/US/95/10
686, filed
August 21,
1995, which
corresponds to
Application
Serial No.
08/294,621
Right angle Germany 2302630 07/18/74
dental tool
attachment
Right angle Switzerland 561538 05/15/75
dental tool
attachment
Right angle Austria 7300364 10/15/79
dental tool
attachment
64
DENTICATOR INTERNATIONAL, INC. TRADEMARKS AND TRADEMARK APPLICATIONS
XXXX REG. NO. APP. DATE FIRST USE COUNTRY
---- -------- --------- --------- -------
the color Green 1,953,869 2/12/90 U.S.
for Disposable
Prophylaxis
Angles
the shape of 1,793,277 2/12/90 U.S.
Disposable
Prophylaxis Angle
Handle
The Denticator 358,971 4/11/38 U.S.
Denticator 1,071,240 9/19/75 U.S.
Near Perfect 1,139,435 7/30/79 U.S.
Pick-A-Dent 699,916 4/2/59 U.S.
Plaque-Away 1,565,351 1/22/88 U.S.
Spirex 1,021,451 12/6/74 U.S.
Tip-A-Dent 796,812 12/8/64 U.S.
Xxxxxx 716,125 7/26/60 U.S.
Water-Dent 1,660,701 3/12/90 U.S.
65
EXHIBIT 12.1.1
DOCUMENTS AND REQUIREMENTS LIST
66
DOCUMENTS AND REQUIREMENTS LIST
Young Innovations, Inc., Young Dental Manufacturing Company,
Lorvic Holdings, Inc., The Lorvic Corporation, and Denticator,
International, Inc. (collectively, "Borrower")
$18,500,000 Senior Secured Financing
Provided by
The Boatmen's National Bank of St. Louis ("Lender")
KEY
BNB = THE BOATMEN'S NATIONAL BANK OF ST. XXXXX
XXX = BORROWERS AND/OR THEIR COUNSEL
LRF = XXXXX, RICE & XXXXXXXX, X.X. (COUNSEL FOR BNB)
SELLER = DENTICATOR INTERNATIONAL, INC., a California corporation
TITLE = COMMONWEALTH LAND TITLE INSURANCE COMPANY
--------------------------------------------------------------------------------
DOCUMENT OR REQUIREMENT
--------------------------------------------------------------------------------
1. Loan Agreement to be executed by Borrowers and Lender
--------------------------------------------------------------------------------
2. Exhibits to Loan Agreement
--------------------------------------------------------------------------------
a. EXHIBIT 10.1.2 - Real Property Collateral
--------------------------------------------------------------------------------
b. EXHIBIT 10.1.3 - Intellectual Property
--------------------------------------------------------------------------------
c. EXHIBIT 12.1.1 - Documents and Requirements List
--------------------------------------------------------------------------------
d. EXHIBIT 13 - Disclosure Schedule
--------------------------------------------------------------------------------
e. EXHIBIT 13.34 - Real Estate Owned/Leased By
Borrower/Leased From Borrower
--------------------------------------------------------------------------------
f. EXHIBIT 13.36 - Chief Place Of Business; Locations Of
Collateral
--------------------------------------------------------------------------------
g. EXHIBIT 13.40 - Subsidiaries and Affiliates
--------------------------------------------------------------------------------
h. EXHIBIT 13.41 - Bank Accounts and Lockboxes
--------------------------------------------------------------------------------
i. EXHIBIT 15.14 - Compliance Certificate
--------------------------------------------------------------------------------
3. Promissory Notes to be executed by Borrowers:
--------------------------------------------------------------------------------
67
--------------------------------------------------------------------------------
a. $12,000,000 Term Loan Note
--------------------------------------------------------------------------------
b. $ 6,500,000 Revolving Line of Credit Note
--------------------------------------------------------------------------------
4. Stock Pledge Agreements to be executed by all of the
owners of the capital stock of each of:
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc. (2 X. Xxxxxxxx Trusts)
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
5. Stock Certificates together with Stock Powers executed in
blank by each owner of all shares with respect to the
following:
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
6. Security Agreement covering all the Personal Property
Collateral of each Borrower, executed by each Borrower.
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
7. UCC-1 Financing Statements executed by each Borrower as
"Debtor" in favor of Lender as "Secured Party" with
respect to the personal property collateral and filed with
each of the following:
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) Xx. Xxxxx Xxxxxx
--------------------------------------------------------------------------------
(xxx) Xx. Xxxxx Xxxxxx Fixture
--------------------------------------------------------------------------------
(iv) California Secretary of State
--------------------------------------------------------------------------------
ii
68
--------------------------------------------------------------------------------
(v) Sacramento County, California
--------------------------------------------------------------------------------
(vi) Sacramento County, California Fixture
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) Xx. Xxxxx Xxxxxx
--------------------------------------------------------------------------------
(xxx) Xx. Xxxxx Xxxxxx Fixture
--------------------------------------------------------------------------------
(iv) Texas Secretary of State
--------------------------------------------------------------------------------
(v) Cameron County, Texas
--------------------------------------------------------------------------------
(vi) Cameron County, Texas Fixture
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) St. Louis County
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) Xx. Xxxxx Xxxxxx
--------------------------------------------------------------------------------
(xxx) Xx. Xxxxx Xxxxxx Fixture
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) St. Louis County
--------------------------------------------------------------------------------
(iii) California Secretary of State
--------------------------------------------------------------------------------
(iv) Sacramento County, California
--------------------------------------------------------------------------------
(v) Sacramento County, California Fixture
--------------------------------------------------------------------------------
8. Deed of Trust covering all of the Real Property Collateral
executed by each of the following:
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company with respect to:
--------------------------------------------------------------------------------
(i) 13705 Shoreline, Earth City, Missouri
--------------------------------------------------------------------------------
(ii) 0000 Xxxxxxxxx Xxxxxxxxxx, Xx. Xxxxx, Xxxxxxxx
--------------------------------------------------------------------------------
(iii) 4401 Xxxxxxx, Brownsville,
Texas
--------------------------------------------------------------------------------
b. The Lorvic Corporation with respect to:
--------------------------------------------------------------------------------
(i) 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx
--------------------------------------------------------------------------------
iii
69
--------------------------------------------------------------------------------
9. Landlord Waiver, Subordination and Estoppel with respect
to Rancho Cordova, California
--------------------------------------------------------------------------------
10. Assignment of Sale Contract (2418 Northline Ind.; Maryland
Heights Facility)
--------------------------------------------------------------------------------
11. Copy of Sale Contract (Maryland Heights Facility)
--------------------------------------------------------------------------------
12. Assignment of General Contractor's Contract, Plans &
Specifications
--------------------------------------------------------------------------------
13. Collateral Assignment of Trademark and Tradename by each
of:
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
14. Collateral Assignment of Patents executed by each of the
Borrowers
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Co.
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
15. Certificate of Seller with respect to satisfaction of all
conditions precedent to Acquisition Agreement
--------------------------------------------------------------------------------
16. Copies of all Acquisition documents, including schedules
--------------------------------------------------------------------------------
17. Disbursement Direction Letter executed by Borrowers in
favor of Lender
--------------------------------------------------------------------------------
18. Closing Statement with respect to Acquisition of
Denticator International assets
--------------------------------------------------------------------------------
19. Standard Lockbox Agreement to be executed by each of
Borrowers
--------------------------------------------------------------------------------
20. Assignment of Cash Collateral Account by each Borrower
--------------------------------------------------------------------------------
21. Bailee Letters from each of:
--------------------------------------------------------------------------------
x. Xxxxxxxx Air Freight
--------------------------------------------------------------------------------
x. Xxxxxxxx Moulds, Inc.
--------------------------------------------------------------------------------
iv
70
---------------------------------------------------------------------------------------------------------------
c. CAPS
---------------------------------------------------------------------------------------------------------------
d. Northwest Bottling
---------------------------------------------------------------------------------------------------------------
22. Assignment of Government Contracts; together with Notices
to DO & CO
---------------------------------------------------------------------------------------------------------------
23. Assignment of Rate Protection Agreement
---------------------------------------------------------------------------------------------------------------
24. Opinion of Counsel for Borrower covering the subject
matter described in the Opinion Specification attachment
hereto
---------------------------------------------------------------------------------------------------------------
25. Payoff Letter from United Missouri Bank
---------------------------------------------------------------------------------------------------------------
26. Release of existing liens on Real Property Collateral
---------------------------------------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company with respect to:
---------------------------------------------------------------------------------------------------------------
(i) 13705 Shoreline, Earth City, Missouri - UMB
---------------------------------------------------------------------------------------------------------------
(ii) 2418 Northline Industrial, St. Louis, Missouri -
UMB
---------------------------------------------------------------------------------------------------------------
(iii) 4401 Xxxxxxx, Brownsville,
Texas - UMB
---------------------------------------------------------------------------------------------------------------
b. The Lorvic Corporation with respect to:
---------------------------------------------------------------------------------------------------------------
(i) 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx - UMB
---------------------------------------------------------------------------------------------------------------
27. Mortgagee's Title Insurance Commitment meeting the
requirement of the Mortgagee's Title Insurance
Specification attachment hereto
---------------------------------------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company with respect to:
---------------------------------------------------------------------------------------------------------------
(i) 13705 Shoreline, Earth City, Missouri
---------------------------------------------------------------------------------------------------------------
(ii) 0000 Xxxxxxxxx Xxxxxxxxxx, Xx. Xxxxx, Xxxxxxxx
---------------------------------------------------------------------------------------------------------------
(iii) 4401 Xxxxxxx, Brownsville,
Texas
---------------------------------------------------------------------------------------------------------------
b. The Lorvic Corporation with respect to:
---------------------------------------------------------------------------------------------------------------
(i) 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx
---------------------------------------------------------------------------------------------------------------
c. Denticator California Facility
---------------------------------------------------------------------------------------------------------------
28. Copies of documentation supporting Permitted Exceptions in
Mortgagee's Title Insurance Commitment
---------------------------------------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company with respect to:
---------------------------------------------------------------------------------------------------------------
(i) 13705 Shoreline, Earth City, Missouri
---------------------------------------------------------------------------------------------------------------
(ii) 0000 Xxxxxxxxx Xxxxxxxxxx, Xx. Xxxxx, Xxxxxxxx
---------------------------------------------------------------------------------------------------------------
v
71
--------------------------------------------------------------------------------------------------------------------
(iii) 4401 Xxxxxxx, Brownsville,
Texas
--------------------------------------------------------------------------------------------------------------------
b. The Lorvic Corporation with respect to:
--------------------------------------------------------------------------------------------------------------------
(i) 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx
--------------------------------------------------------------------------------------------------------------------
29. Other documents required by Title Company for issuance of
Mortgagee's Title Insurance Policy meeting the
requirements of the Title Insurance Specification
attachment hereto
--------------------------------------------------------------------------------------------------------------------
30. Closing and recording instruction letter to Title Company
--------------------------------------------------------------------------------------------------------------------
31. Hazardous Waste Documentation as required by Loan
Agreement
--------------------------------------------------------------------------------------------------------------------
32. "No Flood Hazard" Certification
--------------------------------------------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company with respect to:
--------------------------------------------------------------------------------------------------------------------
(i) 13705 Shoreline, Earth City, Missouri
--------------------------------------------------------------------------------------------------------------------
(ii) 0000 Xxxxxxxxx Xxxxxxxxxx, Xx. Xxxxx, Xxxxxxxx
--------------------------------------------------------------------------------------------------------------------
(iii) 4401 Xxxxxxx, Brownsville, Texas
--------------------------------------------------------------------------------------------------------------------
b. The Lorvic Corporation with respect to:
--------------------------------------------------------------------------------------------------------------------
(i) 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx
--------------------------------------------------------------------------------------------------------------------
33. Copies of all leases affecting each parcel of the Real
Property Collateral
--------------------------------------------------------------------------------------------------------------------
34. UCC Termination Statements covering existing UCC-1 filings
that are not Permitted Security Interests:
--------------------------------------------------------------------------------------------------------------------
a. CA Secretary of State - Bank of California - Release
of Denticator International, Inc., #9516560297, filed
6/12/95
--------------------------------------------------------------------------------------------------------------------
vi
72
--------------------------------------------------------------------------------
b. UMB (Release of Young Dental Manufacturing Company, The Lorvic
Corporation and Lorvic Holdings, Inc.)
i. TX Secretary of State, #0090793, filed 5/8/95;
#0090794, filed 5/8/95; #0090795, filed 5/8/95
ii. MO Secretary of State, #2538886, filed 5/10/95;
#2538887, filed 5/10/95; #2538888, filed 5/10/95;
#2538889, filed 5/10/95; #2538890, filed 5/10/95;
#2538891, filed 5/10/95; #2538892, filed 5/10/95;
#2538893, filed 5/10/95; and #2538894, filed 5/10/95
iii. St. Louis County Recorder of Deeds, #006056, filed
5/8/95; #006057, filed 5/8/95; #006058, filed 5/8/95;
#006053, filed 5/8/95; #006054, filed 5/8/95; #006055,
filed 5/8/95; #006050, filed 5/8/95; #006051, filed
5/8/95; and #006052, filed 5/8/95
iv. Cameron County, TX Recorder, #152077, filed 5/10/95;
#152079, filed 5/10/95; and #152078, filed 5/10/95
--------------------------------------------------------------------------------
35. Borrowers' Secretary's Certificate (certifying resolutions, Articles or
Certificate of Incorporation, Bylaws and Incumbency of officers
authorized to execute Loan Documents)
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
36. Good Standing Certificate for Borrower
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) Texas Secretary of State
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
vii
73
--------------------------------------------------------------------------------
(i) Delaware Secretary of State
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) Delaware Secretary of State
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) California Secretary of State
--------------------------------------------------------------------------------
37. Patent search of records of U.S. Office of Patents and
Trademarks
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
38. Trademark search of records of U.S. Office of Patents and
Trademarks
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
39. Financial Statements for Borrower
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
40. Copy of most recently filed tax returns for Borrower
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
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74
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
e. (Denticator)
--------------------------------------------------------------------------------
41. Binders of Insurance meeting the applicable requirements
of the Insurance Specification attachment hereto
--------------------------------------------------------------------------------
42. Copies of declaration pages from Insurance Policies, with endorsements,
meeting the applicable requirements of the Insurance Specification
attachment hereto
--------------------------------------------------------------------------------
43. Copies of Construction Contracts with respect to Young Dental
improvements to Earth City property.
--------------------------------------------------------------------------------
44. Copies of all consents, licenses and approvals required for
execution of Loan Documents (if any)
--------------------------------------------------------------------------------
45. Pre-closing UCC Searches, Tax Lien, Judgment Lien and Pending Suits
for each of the Borrowers with the Texas, California and Missouri
Secretaries of State, St. Louis City, St. Louis County, Cameron County,
Texas and Sacramento County, California
--------------------------------------------------------------------------------
46. Post-filing UCC, Tax Lien, Judgment Lien and Pending Suit Searches:
--------------------------------------------------------------------------------
x. Xxxxx Innovations, Inc.
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) St. Louis City
--------------------------------------------------------------------------------
(iii) St. Louis County
--------------------------------------------------------------------------------
(iv) Texas Secretary of State
--------------------------------------------------------------------------------
(v) Cameron, Texas
--------------------------------------------------------------------------------
(vi) California Secretary of State
--------------------------------------------------------------------------------
(vii) Sacramento, California
--------------------------------------------------------------------------------
x. Xxxxx Dental Manufacturing Company
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) St. Louis City
--------------------------------------------------------------------------------
(iii) St. Louis County
--------------------------------------------------------------------------------
(iv) Texas Secretary of State
--------------------------------------------------------------------------------
(v) Cameron, Texas
--------------------------------------------------------------------------------
(vi) California Secretary of State
--------------------------------------------------------------------------------
(vii) Sacramento, California
--------------------------------------------------------------------------------
c. Lorvic Holdings, Inc.
--------------------------------------------------------------------------------
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75
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) St. Louis City
--------------------------------------------------------------------------------
(iii) St. Louis County
--------------------------------------------------------------------------------
(iv) Texas Secretary of State
--------------------------------------------------------------------------------
(v) Cameron, Texas
--------------------------------------------------------------------------------
(vi) California Secretary of State
--------------------------------------------------------------------------------
(vii) Sacramento, California
--------------------------------------------------------------------------------
d. The Lorvic Corporation
--------------------------------------------------------------------------------
(i) Missouri Secretary of State
--------------------------------------------------------------------------------
(ii) St. Louis City
--------------------------------------------------------------------------------
(iii) St. Louis County
--------------------------------------------------------------------------------
(iv) Texas Secretary of State
--------------------------------------------------------------------------------
(v) Cameron, Texas
--------------------------------------------------------------------------------
(vi) California Secretary of State
--------------------------------------------------------------------------------
(vii) Sacramento, California
--------------------------------------------------------------------------------
e. Denticator
--------------------------------------------------------------------------------
(i) California Secretary of State
--------------------------------------------------------------------------------
(ii) Sacramento, California
--------------------------------------------------------------------------------
47. Copy of Denticator Lease Rancho Cordova, California
--------------------------------------------------------------------------------
48. Landlord Consent to Assignment of Lease to Denticator
Rancho Cordova, California
--------------------------------------------------------------------------------
49. Payment to Lender of the amount of all its fees and
expenses incurred in connection with this transaction
including, without limitation, all recording and filing
fees, fees for all mortgagee title commitments, premiums
for all mortgagee title policies, fees and costs for any
and all appraisal reports and environmental reports,
audits, and studies, and all legal fees and expenses.
Lender shall also require evidence that all taxes and
assessments due and payable at the time of closing with
respect to the Real Property Collateral, and all mechanics
liens of record or known to Borrower at the time of closing
have been paid in full and have been dismissed
with prejudice.
--------------------------------------------------------------------------------
x
76
ATTACHMENT TO DOCUMENTS AND REQUIREMENTS LIST
OPINION SPECIFICATION
Legal opinion of corporate and local counsel to Borrower must be on firm
letterhead and together meet these requirements:
1. Address to The Boatmen's National Bank of St. Louis at 00 Xxxx
Xxxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
2. Refer to Loan Agreement and use its definitions.
3. Give opinions on the subjects covered in all of the following example
paragraphs:
a. Borrowers are corporations duly formed, validly existing and in
good standing under the Laws of the State of their organization
and are duly qualified and authorized to do business and are in
good standing as foreign corporation in all states where the
nature and extent of the business transacted by them or the
ownership of their assets makes such qualification necessary,
except where the failure to so qualify will not have a Material
Adverse Effect.
b. Each Borrower has all requisite corporate power, authority and
legal capacity and legal rights (a) to own, lease and operate
its properties and assets and to carry on its business as now
being conducted and (b) to execute, deliver and perform the
terms of the Loan Documents to which it is a party.
c. All action on the part of each Borrower requisite for the
execution, delivery and performance of the Loan Documents to
which it is a party has been duly taken.
d. The execution, delivery and performance of the Loan Documents by
each Borrower will not (a) violate, be in conflict with, result
in the breach of, or constitute (with due notice or lapse of
time, or both) a default under (i) Borrowers' Charter Documents,
or (ii) any franchise, agreement, indenture, or other instrument
to which a Borrower is a party or by which it or any of its
property is bound or affected or (iii) any Law or other legal
requirement applicable to a Borrower, or (b) result in the
creation or imposition of a Security Interest of any nature
whatsoever upon Borrowers' property or assets other than
pursuant to the Loan Documents.
e. Each Borrower has duly executed and delivered each of the Loan
Documents to which it is a party and each such Loan Document
constitutes the legal, valid and binding
xi
77
obligation of each Borrower enforceable against each Borrower
in accordance with its terms.
f. Each Person who signed any Loan Document as an officer of a
Borrower is duly authorized on behalf of a Borrower to execute,
deliver and perform such document on behalf of such Borrower and
is duly authorized to perform its obligations thereunder and to
incur the obligations and make the representations, warranties and
covenants made by it in such Loan Document.
g. Each Borrower has all certificates of authority, licenses,
permits, qualifications and documentation to own, lease and
operate its properties and to carry on its business as now being
conducted, and is in compliance with all Laws applicable to the
conduct of its business.
h. No consent, approval or other authorization of or by, or
registration or filing with, any Governmental Authority or other
Person is required in connection with the execution, delivery and
performance by Borrower of the Loan Documents to which it is a
party that has not already been obtained and a copy thereof
delivered to Lender.
i. There are no actions, proceedings or investigations pending or
threatened against any Borrower which might adversely affect the
validity or enforceability of any of the Loan Documents, the
ability of each Borrower to perform its obligations thereunder or
which might adversely affect the business, operations, revenues,
financial condition, property or business prospects of any
Borrower.
j. The use of the proceeds of the Loans will not violate Regulations
G, T, U or X of the Federal Reserve Board.
k. The Security Documents will create in favor of Lender, a legal,
valid, and enforceable Security Interest in the personal property
described therein as security for the Loan Obligations. The
Financing Statements are in proper form for recording or filing, as
the case may be, in the public offices identified on Exhibit A to
this letter and when the Financing Statements are filed in those
public offices, the Security Interests of Lender or Administrative
Agent, as the case may be, in the personal property described
therein will be perfected to the extent such Security Interests
may be perfected by filing. To our best knowledge, Borrowers have
no places of business other than as disclosed in the Loan
Agreement.
xii
78
l. The Missouri Deed of Trust and the Texas Deed of Trust are in proper
form for recording and contains the terms and provisions necessary to
enable Lender, following a default under such Deed of Trust, to
exercise all of the remedies which are customarily available to a real
estate lienholder under the Laws of the States of Missouri and Texas.
Assuming the proper recording of the Deed of Trust, the Deed of Trust
will be a legal, valid and enforceable mortgage Security Interest on
the Real Property Collateral in favor of Lender, to secure all of the
Loan Obligations.
m. Upon delivery to Lender of certificates identified in each Stock Pledge
Agreement, Lender will have a valid, perfected and first priority
security interest in and to all authorized and issued shares of each
Borrower to secure payment of all of the Loan Obligations. All of the
shares of the pledged stock are duly authorized, validly issued, fully
paid and non-assessable.
n. Neither the Deed of Trust, the Assignment of Rents nor the Financing
Statements require the payment of any stamp tax or intangible tax or any
recording, filing, privilege or other similar tax, fee or charge in
connection with the execution, delivery, recordation or enforcement
thereof, or any other state or local tax, fee or charge, except for
customary recording fees in connection with the indebtedness or
transactions evidenced by the Loan Documents (other than income,
franchise, excess profits or capital stock taxes).
o. If a court were to find that the Loan Documents are governed by, or are
to be construed or interpreted in accordance with, the Laws of the
State of Texas or California, the provisions of the Loan Documents
regarding interest required to be paid by Borrower will not violate any
Law of the State of Texas or California that limits the amount of
interest that may be charged or collected on a loan of money or the
method by which such interest is computed.
p. A Texas/California court of competent jurisdiction with the issues
properly before it will honor the choice of law provisions included
in the Loan Agreement and the Security Documents except that a
Texas/California court will apply Missouri law to questions regarding
perfection by filing in the State of Texas/California of the Security
Interest granted to Lender, in Personal Property Collateral pursuant to
the Security Documents and the exercise in Texas/California of Bank's
remedies thereunder.
xiii
79
4. Add appropriate exceptions limitations, all of which must be acceptable
to Lender.
5. Signature by a partner of the firm in his individual name or in the
name of the firm.
xiv
80
ATTACHMENT TO DOCUMENTS AND REQUIREMENTS LIST
TITLE INSURANCE SPECIFICATION
Commitment for issuance to Boatmen's, by a title insurer acceptable to Boatmen's
("Title Company"), of a Loan Title Insurance Policy that will (i) be in 1992
ALTA Loan Policy form; (ii) insure that title to the Real Property Collateral
is vested in Borrowers as owner, (iii) delete the standard exceptions
(which can be deleted without a survey) and insure that Lender has a valid
first mortgage lien thereon subject only to Permitted Security Interests and
encumbrances applicable to the Real Property Collateral that exist on the
effective date of the Loan Agreement and without exceptions other than taxes
for the current year which are not delinquent and such other exceptions as are
approved by Agents in their sole discretion; (iv) revise tax exception to read
as follows: "Taxes for 1996 a lien not yet due and payable, and subsequent
years"; and (v) contain the following endorsements: (a) Revolving Credit/Future
Advance; (b) variable rate; (c) others as Lender deems necessary.
xv
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ATTACHMENT TO DOCUMENTS AND REQUIREMENTS LIST
INSURANCE SPECIFICATION
1. Borrower shall maintain insurance, with insurance companies licensed
to do business in the States of Missouri, Texas and California, as appropriate
(the "State") against such risks, loss, damage and liability (including
liability to third parties) and for such amounts as are customarily insured
against by other enterprises of like size and type as that of Borrower,
including, without limitation:
A. Property damage insurance, which insurance shall include
coverage for removal of debris, insuring the buildings, structures, facilities,
fixtures, machinery, equipment and other property constituting a part of the
Collateral against loss or damage to the Collateral by fire, lightning,
vandalism, malicious mischief, windstorm, hail, explosion, underground,
collapse, aircraft, vehicles and smoke and other casualties as may be included
in the standard form of "all risk" building insurance, at all times in an
amount such that the proceeds of such insurance shall be sufficient to prevent
Lenders from becoming a co-insurer of any loss under the insurance policies but
in any event in amounts equal to not less than the greater of (A) the actual
replacement value of the Collateral as determined by a qualified insurance
appraiser or insurer (selected by Borrower and approved by the Agents) not less
often than once every year expense of Borrower, and (B) the principal amount of
the Aggregate Loan. Any such insurance may provide that the insurer is not
liable to the extent of the first $250,000 with the result that Borrower is its
own insurer to the extent of $250,000 of such risks.
B. Builder's risk insurance in an amount equal to the actual
replacement value of the Collateral.
C. Earthquake insurance at all times in the amount of
$10,000,000.
D. Business interruption insurance against loss of income
arising our of damage or destruction by fire and such other hazards as may be
included in the "all risk" business insurance carried under paragraph A in an
amount at least equivalent two year's debt service, taxes and other expenses
that will not be reduced by reason of any such damage or destruction.
E. Public liability insurance in accordance with customary
insurance practices for similar operations with respect to the Collateral and
the business thereby conducted in a minimum amount of $12,000,000 which
insurance (A) will also provide coverage of Borrower's obligations to perform
its
xvi
82
obligations under any agreement running to the benefit of the Lenders
(B) may be effected under overall blanket or excess coverage policies of
Borrower, and (C) shall not contain any provisions for deductible amount.
F. Excess coverage.
G. Auto liability insurance in such amount and against such
insurable hazards as Agents from time to time may reasonably require.
H. Boiler and machine property damage insurance in respect of any
steam and pressure boilers and similar apparatus located on the Collateral
from risks normally insured against under boiler and machinery policies
and in amounts and with deductibles customarily obtained for similar
business enterprises and in each case approved by Agents.
I. Workers' compensation insurance, disability benefits insurance
and such other forms of insurance which Borrower is required by law to
provide, covering loss resulting from injury, sickness, disability or
death of the employees of Borrower or of any contractor or subcontractor
performing work with respect to the Collateral. Borrower shall require
that all said contractors and subcontractors shall maintain all forms or
types of insurance with respect to their employees required by law.
J. If the Collateral is located in a HUD identified flood hazard
area, flood insurance in an amount equal to the greater of (a) the maximum
amount of federal flood insurance available or (b) the lesser of (i) the
amount of any mortgage encumbering the Collateral in favor of the Lender
for the benefit of the Lenders, and (ii) $10,000,000, with the first year
premium thereon prepaid.
K. Such other insurance in such amounts and against such insurable
hazards as Agents from time to time may reasonably require.
2. All insurance required above shall be procured and maintained in
financially sound and generally recognized responsible insurance companies
authorized to write such insurance in the State.
3. The insurance policies required above shall:
A. Designate (except in the case of Workers' Compensation
Insurance) Borrower and Lender as additional insureds as their respective
interests may appear on all public liability and Owners and Contractors
Protective Liability coverage.
xvii
83
B. Provide that all insurance proceeds with respect to loss or
damage to any real property upon which Lender holds a mortgage or any tangible
personal property in which Lender holds a Security Interest (collectively, the
"Property") be endorsed and made payable to Lender and shall name Lender as
Loss Payee under the standard mortgagee clause;
C. Provide that there shall be no recourse against Lender for the
payment of premiums or commissions or (if such policies or binders provide for
the payment thereof) additional premiums or assessments;
D. Provide that in respect of the respective interests of Lender
in such policies, the insurance shall not be invalidated by any action or
inaction of Borrower, any subsidiary or any third party and shall insure Lender
for the benefit of the Lenders regardless of and any losses shall be payable
notwithstanding:
1. Any act or negligence, including any breach of any
condition, declaration or warranty contained in any such policy of
insurance by Borrower, any subsidiary or any third party;
2. The occupation, operation or use of the Property for
purposes more hazardous than permitted by the terms of the policy;
3. Any foreclosure or other proceeding or notice of sale
relating to the Property; or
4. Any change in the title to or ownership of all or any
portion of the Property.
E. Provide that such insurance shall be primary insurance without
any right of contribution from any other insurance carried by Lender to the
extent that such other insurance provides Lender, as the case may be, with
contingent and/or excess liability insurance with respect to its respective
interest as such in the Property, and shall expressly provide that all
provisions thereof, except the limits of liability (which shall be applicable
to all insureds as a group) and liability for premiums (which shall be solely a
liability of Borrower) shall operate in the same manner as if there were a
separate policy covering such insured;
F. Provide that if the insurers cancel such insurance for any
reason whatsoever, or the same is allowed to lapse or expire, or there be any
reduction in amount, or any material change is made in the coverage, such
cancellation, lapse, expiration, reduction or change shall not be effective as
to Lender until at least thirty (30) days after receipt by
xviii
84
Lender, respectively, of written notice by such insurers of such
cancellation, lapse, expiration or change;
G. Waives any right of subrogation of the insurers
thereunder against any party insured under such policy, and waives any
right of the insurers of any setoff or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any
liability of any party insured under such policy.
4. Each of the policies providing the insurance required above
shall be subject to the terms and conditions set forth in this Exhibit.
xix
85
EXHIBIT 13
Disclosure Schedule
13.8 No Material Proceedings - There is an appeal in process due to the loss of
a patent and theft of trade secrets trial. A
bond has been posted for a counterclaim of court
and copying costs of the defendant.
- There is an ongoing IRS action involving the
discussion of the classification of employees
versus homeworkers.
- Lorvic Holding/The Lorvic Corporation is in an
ongoing IRS action involving the amortization
of Goodwill from prior years. The estimated
amount of liability has been put into an escrow
account with Boatmen's Bank.
13.10.5 Real Property - We discovered in 1991 that the septic system in
Brownsville, TX had been contaminated from chemicals
used in our plating operation. We contracted with a
licensed firm to cleanup all hazardous waste in the
septic system and the surrounding ground with the job
completed in 1992.
- The Lorvic grounds were contaminated by radioactive
dirt when the federal government had the contaminated
dirt transported from facilities that produced nuclear
waste in the area. The surrounding area was part of a
Superfund Site and was recently cleaned up by the
federal government.
13.23 Investments - $100.000 face value Allegheny County PA Airport revenue
bonds dated 7/1/88 and due 1/1/2019 with a coupon rate
of 7.75% paid semi-annually on Jan 1 and July 1.
- $100.000 face value Lower Colorado River Authority Tax
revenue bonds dated 3/1/87 and due 1/1/2009 with a
coupon rate of 7.00% paid semi-annually on Jan 1 and
July 1.
- Xxxxxx & Company, Inc. brokerage account and Alliance
Municipal Trust mutual fund for holding funds usually
from bond interest payments - account
#248-01432-1-9-030.
- 25 shares of Allmerica Financial Corporation - not kept
on Young's books.
13.25 Indirect Obligation - Young Innovations, Inc. has 202.095 shares of stock
owned by employees who have an agreement with the
company whereby the company may have to repurchase
the shares of the employee upon an event. The
value of this contingent liability is not reflected
on the books and was last estimated at $589.000.
13.27 & 13.28 Operating and Capital Leases - The following leases are
currently in effect:
Young Dental - Telephone system at 00000 Xxxxxxxxx Xx
Xxxx dated 10/96 for a term of 60 months
at an initial rate of $960.00 per month.
Lorvic Corporation - 1992 Plymouth Voyager LE dated 3/96
for a term of 12months @ $384/mo
Denticator - Building at 00000 Xxxxxxx Xxxx Xxxxx, Xxxxxx
Xxxxxxx set to expire 5/97 @ $2100/mo.
- Office Furniture dated 6/95 for a term of
24 months $277/mo.
- Computer system dated 9/95 for a term of 36
months @ $1343/mo.
- Telephone system dated 6/95 for a term of 60
months @ $363/mo.
- Copier dated 6/95 for a term of 60 months
@ $165/mo.
- 1996 Ford Explorer dated 11/95 for a term of
48 months @ $400/mo.
- 1995 Honda Accord EX dated 8/95 for a term
of 24 months @ $428/mo.
- 1996 Dodge BR1500 dated 11/95 for a term of
48 months @ $449/mo
- 1996 Lexus ES300 dated 11/95 for a term of
48 months @ $489/mo.
- 1996 Toyota Avalon dated 11/95 for a term of
36 months @ $473/mo.
page 1
86
EXHIBIT 13
Disclosure Schedule
13.35.2 Inventory - Inventory subject to licensing, patent, royalty, trademark,
trade name, or copyright agreements:
Xx. Xxxxxxx Xxxxxxxxxx - Turbo Cup royalty
Xx. Xxxxxxx Xxxxxx - D'Granulator royalty
Xx. Xxxxxxx Xx - Xx Bands royalty
Xx. Xxxxxxxx Xxxxxx - Vent-O-Vac royalty
Xxxxx Xxxxxx - Vent-O-Vac royalty
Xxxx XxXxxx - Vent-O-Vac royalty
Indiana University - Magnasil Paste royalty
Denticator - Pick-A-Dent
13.35.4 Intellectual Property - Intellectual property subject to pending or
threatened challenge:
Patents on Young Dental Disposal Prophy Angle
87
EXHIBIT 13.34
REAL ESTATE OWNED/LEASED BY BORROWER/LEASED FROM BORROWER
Owned by a Borrower
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxx XX 00000
0000 Xxxxx Xxxxxx
Xx. Xxxxx XX 00000
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxxx XX 00000
0000 Xxxxxxx Xxxx Xx.,
Xxxxxxxxxxx, Xxxxx 00000
Leased by a Borrower
00000 Xxxxxxx Xxxx Xxxxx,
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Leased from a Borrower
a portion of 00000 Xxxxxxxxx Xxxxx Xxxx,
Xxxxx Xxxx XX 00000 by an Affiliate of Borrowers, Solutions in 3-D at a rate of
approximately $700 per month
Personal Property Leased by a Borrower
See Exhibit 13 - sections concerning leases
88
EXHIBIT 13.36
CHIEF PLACE OF BUSINESS; LOCATIONS OF COLLATERAL
Chief Place of Business, Location of Books and Records, Executive Xxxxxx
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxx XX 00000
00000 Xxxxxxx Xxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Location of Collateral
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxx XX 00000
0000 Xxxxx Xxxxxx
Xx. Xxxxx XX 00000
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxx Xxxxxxx XX 00000
0000 Xxxxxxx Xxxx Xx.,
Xxxxxxxxxxx, Xxxxx 00000
00000 Xxxxxxx Xxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Davidson Air Freight - for Storage of Inventory
000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
CAPS - molds, equipment and injection molded components
00000 Xxxxxxxxxx Xx.
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxxx Moulds, Inc. - molds, equipment and injection molded components
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
89
EXHIBIT 13.40
SUBSIDIARIES AND AFFILIATES
Young Innovations, Inc., a Missouri corporation
Young Dental Manufacturing Company, a Missouri corporation
Lorvic Holdings, Inc., a Delaware corporation
The Lorvic Corporation, a Delaware corporation
Denticator International, Inc., a Missouri corporation
Young Dental International, Inc., a Barbados corporation
Xxxxxx X. Xxxxxxxx Trust, dated July 6, 1973, Xxxxxx X. Xxxxxxxx, Trustee
Xxxxxx X. Xxxxxxxx and Commerce Bank of Missouri Trust, dated January 14, 0000,
Xxxxxx X. Xxxxxxxx and _______________, Trustee
90
EXHIBIT 13.41
BANK ACCOUNTS AND LOCKBOXES
United Missouri Bank
Payroll Account - #60-7069-603-4
Operating Account - #61-0140-147-1
Zero Balance - #59-0099-131-3
Texas Bank & Trust
Operating Account - #0000000
Fleet Bank
Pegged Balance Account - #005-033-5545
91
EXHIBIT 15.14
COMPLIANCE CERTIFICATE
TO: THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
This Compliance Certificate is furnished pursuant to that certain Loan
Agreement executed _______________, 1996 (as the same may be amended, restated
or otherwise modified from time to time, the "Loan Agreement"), among Young
Innovations, Inc., Young Dental Manufacturing Company, Lorvic Holdings, Inc.,
The Lorvic Corporation and Denticator International, Inc. (collectively,
"Borrower") and The Boatmen's National Bank of St. Louis. Unless otherwise
defined herein, capitalized terms used in this Compliance Certificate have the
meanings defined in the Loan Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _______________________ of the Borrowers.
2. I have reviewed the terms of the Loan Agreement and the Loan
Documents and I have made, or have caused to be made under my
supervision, a review of the transactions and conditions of Borrowers
during the accounting period covered by the attached
Financial Statements, prepared on a consolidated basis.
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Event of Default as of the date of this
Compliance Certificate; and to my knowledge all of the
representations and warranties of Borrower contained in the Loan
Agreement and other Loan Documents are true and correct.
4. [Use for annual financial statements: Schedule I attached hereto
contains the Financial Statements for Borrower for the fiscal year
ended ______, which are complete and correct in all material respects
and have been prepared in accordance with GAAP applied consistently
throughout the period and with prior periods (except as
disclosed therein).]
[Use for monthly financial statements: Schedule I attached hereto
contains the Financial Statements for Borrower for the fiscal month
ended _____________, which are complete and correct in all material
respects (subject to normal year-end audit adjustments) and have been
prepared in accordance with GAAP applied consistently throughout the
period and with prior periods (except as disclosed therein).]
5. Borrower is in compliance with all of the covenants in the Loan
Agreement, including the financial covenants in Section 17, Schedule
II attached hereto contains calculations based on Borrower's
financial statements and other financial records that show Borrower's
compliance with such financial covenants. The calculations and the
data upon which they are based are believed by me to be complete
and correct.
This Compliance Certificate, together with the Schedules hereto, is executed
and delivered this _____ day of ____________.
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
92
SCHEDULE I TO COMPLIANCE CERTIFICATE
See current Financial Statements.
93
SCHEDULE II TO COMPLIANCE CERTIFICATE
SECTION 17 FINANCIAL MEASUREMENTS
The following calculations are made in accordance with the provisions of the
Agreement and are based on the fiscal quarter ended ________________:
SECTION 17 FINANCIAL MEASUREMENTS
I. Capital Expenditures (Section 17.1)
A. Period: Fiscal year ended December 31, 199_.
B. Maximum Capital Expenditures during such fiscal year
permitted under Section 17.1 $1,100,000
(not to exceed $2,600,000 including
Earth City expansion prior to 12/31/97)
C. Capital Expenditures during such period $______________
II. Capital Leases (Section 17.2)
A. Capital Leases entered into since the Effective Date
of the Loan Agreement:
[List Leases and amount of leases]
B. Aggregate cost of capital assets leased under such
leases if such capital assets were purchased $______________
C. Maximum Capital Expenditure plus capital lease
obligations during such period permitted under
Section 17.1 and 17.2 See I.B. above
D. Sum of II.B. plus I.C. $______________
III. Operating Leases (Section 17.3)
A. Operating Leases entered into since the Effective Date
of the Loan Agreement:
[List Leases and amount of leases]
B. Aggregate operating lease payments per Fiscal Year $______________
C. Maximum Operating Lease Expenditure during such period permitted
under Section 17.3.
94
IV. MINIMUM EBITDA (SECTION 17.4)
-----------------------------
A. Net income, after provision for income taxes for
the twelve fiscal Months beginning ________________
and ending _____________, calculated in
accordance with GAAP (prior to any LIFO adjustment) $________________
B. Deductions:
a. gain or loss arising from the sale
of any capital asset $________________
b. gain arising from any write-up in the
book value of any asset $________________
c. gain arising from extraordinary items, as determined
in accordance with GAAP, or from any other
non-recurring transaction $________________
C. Sum of IV.B.a through IV.B.c. to the extent such items were
included in IV.A. $_________________
D. Additions:
a. interest expense $__________________
b. provisions for taxes $__________________
c. depreciation and amortization $__________________
d. loss arising from extraordinary items, as determined
in accordance with GAAP, or from any other
non-recurring transaction $__________________
e. non-cash portion of stock bonus paid to X. Xxxxxxx $__________________
E. Sum or IV.D.a through IV.D.e. to the extent such items
were deducted from IV.A. $__________________
F. EBITDA (IV.A minus IV.C. plus IV.E.) $__________________
G. Minimum EBITDA for the period specified by Section 17.4 $__________________
V. FIXED CHARGE COVERAGE (SECTION 17.5)
------------------------------------
A. EBITDA (per IV.F.) $__________________
B.
a. Sum of all interest payments which Borrower
was required to make on Indebtedness for money
borrowed during the twelve fiscal months beginning
_______________ and ended _______________. $__________________
95
b. Sum of all principal payments which Borrower
was required to make on long term Indebtedness
during the twelve fiscal months beginning
____________ and ended ____________. $___________
c. Expenditures in connection with capital leases
during the twelve fiscal months beginning
____________ and ended ____________. $___________
d. Capital Expenditures during the twelve fiscal
months beginning ____________ and ended ____________. $___________
e. federal, state and local income tax expense $___________
C. Sum of IV.B.a through IV.B.e. $___________
D. Ratio of IV.A. to IV.C. ___________
E. Minimum ratio permitted by
Section 17.5 1.10 to 1.0
VI. MINIMUM INTEREST COVERAGE (SECTION 17.6)
A. EBITDA (per I.V. F.) $___________
B. Deductions:
a. depreciation and amortization $___________
b. loss arising from extraordinary items, as determined
in accordance with GAAP, or from any other non-recurring
transaction $___________
c. non-cash portion of stock bonus paid to X. Xxxxxxx $___________
C. VI.A less VI.B $___________
D. Interest Expense for the prior twelve fiscal months $___________
E. Ratio of VI.C. to VI.D. ___________
F. Minimum ratio permitted by
Section 17.6 4.50 to 1.0
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VII. MINIMUM NET WORTH (SECTION 17.7)
(Calculated for the twelve fiscal months ended__________.)
A. Book value of all assets of Borrower $____________
B. Liabilities, including reserves for contingencies
and other potential liabilities $____________
E. Net Worth (VII.A minus VII.B) $____________
F. Minimum Net Worth required by Section 17.7 $____________
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AMENDMENT NO. 1
TO
LOAN AGREEMENT
DATED JULY 22, 1996
BY AND BETWEEN
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
AND
YOUNG INNOVATIONS, INC., YOUNG DENTAL MANUFACTURING COMPANY, LORVIC
HOLDINGS, INC., THE LORVIC CORPORATION AND DENTICATOR INTERNATIONAL, INC.
In consideration of their mutual agreements herein and for other sufficient
consideration, the receipt of which is hereby acknowledged, YOUNG INNOVATIONS,
INC., YOUNG DENTAL MANUFACTURING COMPANY, LORVIC HOLDINGS, INC., THE LORVIC
CORPORATION AND DENTICATOR INTERNATIONAL, INC. (collectively, "Borrowers") and
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS ("Lender") agree as follows:
1. DEFINITIONS; SECTION REFERENCES. The term "Loan Agreement" means the
Loan Agreement dated July 22, 1996 between Borrowers and Lender. The term
"this Amendment" means this Amendment. Capitalized terms used and not
otherwise defined herein have the meanings defined in the Loan Agreement.
2. EFFECTIVE DATE OF THIS AGREEMENT. This Amendment is effective
April 1, 1997.
3. AMENDMENTS TO LOAN AGREEMENT. Subject to satisfaction of the
conditions in Section 4 of this Amendment, the Loan Agreement is amended as
follows:
3.1. INCREASE OF REVOLVING COMMITMENT. Section 2.1.2 of the
Loan Agreement is hereby deleted in its entirety and the following is
substituted therefor:
2.1.2. DEFINITION OF REVOLVING COMMITMENT. The
"Revolving Commitment" on any date shall be $7,000,000, or such
lesser Dollar amount to which it may have been reduced as
provided herein.
4. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. The Amendment shall not
become effective, and the Loan Agreement shall continue in full force and
effect as it existed in the absence of this Amendment unless Borrower shall
deliver to Lender the following, all in form and substance satisfactory to
Lender:
4.1 CERTIFICATE OF SECRETARY OF BORROWER. A Certificate of the
Secretary of each Borrower certifying (i) that the articles or certificate of
incorporation and bylaws of each Borrower previously certified to Lender in
connection with the execution of the Loan Agreement have not been amended,
(ii) that resolutions adopted by the Board of Directors of Borrowers
authorizing the execution, delivery and performance of this Amendment by
Borrowers, are attached to the certificate and remain in full force and effect,
and (iii) the names, titles, and true signatures of the incumbent corporate
officers who are authorized to sign this Amendment or attest signatures or
seals on this Amendment on behalf of each Borrower.
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4.2. ALLONGE. An Allonge to the Revolving Note increasing the available
sum under the Revolving Note is $7,000,000.
5. REPRESENTATIONS AND WARRANTIES OF BORROWERS. Borrowers hereby represent
and a warrant to Lender that (i) execution of this Amendment has been duly
authorized by all requisite action of Borrowers; (ii) no consents are necessary
from any third parties for each Borrower's execution, delivery or performance
of this Amendment, (iii) this Amendment and the Loan Agreement as amended
hereby constitute the legal, valid and binding obligations of Borrowers
enforceable against each Borrower in accordance with their terms, except to the
extent that the enforceability thereof against a Borrower may be limited by
bankruptcy, insolvency or other laws affecting the enforceability of creditors
rights generally or by equity principles of general application, (iv) except as
disclosed on the disclosure schedule attached hereto as Exhibit A and the
disclosure schedule attached to the Loan Agreement, all of the representations
and warranties contained in Section 13 of the Loan Agreement, as amended
hereby, are true and correct in all material respects with the same force and
effect as if made on and as of the effective date of this Amendment, except
that with respect to the representations and warranties made regarding
Financial Statements of the Loan Agreement as amended hereby, such
representations and warranties are hereby made with respect to the most recent
Financial Statements delivered by Borrower to Lender, (v) there exists no
Default which is continuing and no Event or Default has occurred and (vi) no
Default or Event Default will occur immediately or with the passage of time
or giving of notice as a consequence of this Amendment becoming effective.
6. EFFECT OF AMENDMENT. The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of Lender
under the Loan Agreement or any of the other Loan Documents, nor constitute a
waiver of any provision of the Loan Agreement, any of the other Loan Documents
or any existing Default or Event of Default, nor act as a release or
subordination of the Security Interests of Lender under the Security Documents.
Each reference in the Loan Agreement to "the Agreement", "hereunder", "hereof",
"herein", or words of like import, shall be read as referring to the Loan
Agreement as amended hereby.
7. REAFFIRMATION. Borrowers hereby acknowledge and confirm that (i) except
as expressly amended hereby the Loan Agreement and other Loan Documents remain
in full force and effect. (ii) the Loan Agreement, as amended hereby, is in
full force and effect, (iii) no Borrower has defenses to its obligations under
the Loan Agreement and the other Loan Documents, (iv) the Security Interests of
Lender under the Security Documents continue in full force and effect and have
the same priority as before this Amendment, and (v) no Borrower has a claim
against Lender arising from or in connection with the Loan Agreement or the
other Loan Documents.
8. COUNTERPARTS. This Amendment may be executed by the parties hereto on any
number of separate counterparts, and all such counterparts taken together
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Amendment to produce or account for more than one
counterpart signed by the party to be charged.
9. COUNTERPART FACSIMILE EXECUTION. This Amendment, or a signature page
thereto intended to be attached to a copy of this Amendment, signed and
transmitted by facsimile machine or telecopier shall be deemed and treated as
an original document. The signature of
2
99
any person thereon, for purposes hereof, is to be considered as an original
signature, and the document transmitted is to be considered to have the same
binding effect as an original signature on an original document. At the request
of any party hereto, any facsimile or telecopy document is to be re-executed in
original form by the Persons who executed the facsimile or telecopy document.
No party hereto 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 Amendment.
10. GOVERNING LAW; NO THIRD PARTY RIGHTS. This Amendment and the rights and
obligations of the parties hereunder shall be governed by and construed and
interpreted in accordance with the internal laws of the State of Missouri
applicable to contracts made and to be performed wholly within such state,
without regard to choice or conflict of laws provisions.
11. INCORPORATION BY REFERENCE. Lender and Borrowers hereby agree that all
of the terms of the Loan Documents are incorporated in and made a part of this
Amendment by this reference.
12. 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 Amendment:
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.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
3
100
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by appropriate duly authorized officers as of the effective date first
above written.
YOUNG INNOVATIONS, INC. THE BOATMEN'S NATIONAL BANK OF
by its PRESIDENT ST. LOUIS
---------------- by its Vice President
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Halls
----------------------- ----------------------------
Name: Xxxxxxx X. Halls
Name: Xxxxxx X. Xxxxxxxx
------------------
Notice Address:
YOUNG DENTAL MANUFACTURING 00 Xxxx Xxxxxxxx
XXXXXXX Xxxxxxx Xxxxxx, Xxxxxxxx 00000
by its President FAX # (000) 000-0000
------------------- TEL # (000) 000-0000
/s/ Xxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------
LORVIC HOLDINGS, INC.
by its Secretary
-------------------
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxx
--------------------
THE LORVIC CORPORATION
by its Secretary
-------------------
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxx
--------------------
DENTICATOR INTERNATIONAL, INC.
by its Secretary
-------------------
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------
Notice Address for all Borrowers:
00000 Xxxxxxxxx Xx. Xxxx
Xxxxx Xxxx, Xxxxxxxx 00000
FAX # 000-000-0000
TEL # 000-000-0000
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101
EXHIBIT A
SUPPLEMENTAL DISCLOSURE SCHEDULE
NONE, if no items listed below:
5
