EXHIBIT 10
2001 AMENDED AND RESTATED LOAN AGREEMENT
CITIZENS BANK
$4,000,000 REVOLVING CREDIT FACILITY
and
$8,000,000 TERM CREDIT FACILITY
PROVIDED TO
NATIONAL DENTEX CORPORATION
December 31, 2001
TABLE OF CONTENTS
PAGE
1. The Credit Facility; Advances...........................................2
(a) The Credit Facility............................................2
(b) Advances.......................................................2
2. Interest; Payments; Fees; Borrowing.....................................3
(a) Interest.......................................................3
(b) Payments.......................................................3
(c) Additional Payments............................................3
(d) Notice of Borrowing............................................4
(e) Special Provisions Governing Loans.............................4
(f) Increased Capital Costs........................................9
(g) Taxes..........................................................9
3. Letters of Credit......................................................10
(a) Issuance......................................................10
(b) Notice of Proposed Issuance...................................10
(c) Conditions to Issuance........................................10
(d) Expiry Dates..................................................11
(e) Drawings......................................................11
(f) Reimbursement by the Borrower.................................11
(g) Exculpatory Provisions........................................11
(h) Indemnification by Borrower...................................12
4. Definitions............................................................12
5. Representations and Warranties.........................................18
(a) Organization..................................................18
(b) Authority.....................................................19
(c) Approvals.....................................................19
(d) Valid Obligations.............................................19
(e) Assets........................................................19
(f) Agreements....................................................20
(g) Insurance.....................................................20
(h) Litigation and Other Proceedings..............................20
(i) Labor Matters.................................................20
(j) ERISA.........................................................20
(k) Financial Statements..........................................20
(l) Projections...................................................21
(m) Taxes.........................................................21
(n) Investments...................................................21
(o) Investment Company............................................22
(p) Equity Structure..............................................22
(q) Indebtedness for Money Borrowed...............................22
(r) Patents and Trademarks........................................22
(s) Representations Accurate......................................22
6. Covenants..............................................................22
(a) Payments......................................................22
(b) Borrowing Base Certificate....................................22
(c) Financial Report. The Borrower will furnish to the Bank:.....23
(d) Other Financial Reports.......................................23
(e) Maintain Rights...............................................24
(f) No Transfers..................................................24
(g) No Mergers....................................................24
(h) Payment of Taxes..............................................25
(i) Guaranties....................................................25
(j) Agreements....................................................25
(k) Investments...................................................25
(l) Property......................................................26
(m) Books and Records.............................................26
(n) Notices.......................................................26
(o) Liens.........................................................27
(p) Modifications.................................................28
(q) Additional Indebtedness.......................................28
(r) Payments to Affiliated Persons................................28
(s) Minimum Consolidated Tangible Net Worth.......................28
(t) Fixed Charge Coverage Ratio...................................28
(u) Consolidated Net Income.......................................29
(v) Current Ratio.................................................29
7. Conditions of Closing..................................................29
(a) Line of Credit Notes..........................................29
(b) Warranties and Covenants......................................29
(c) Closing Certificate...........................................29
(d) Financial Statements..........................................29
(e) Annual Report.................................................29
(f) No Adverse Change.............................................29
(g) Closing Fees and Legal Expenses...............................29
(h) Legal Opinions................................................30
(i) Projections...................................................30
(j) Other Documents...............................................30
8. Conditions of Making Subsequent Advances...............................30
(a) Representations and Warranties................................30
(b) Performance...................................................30
(c) Acquisitions..................................................30
9. Events of Default......................................................31
(a) Representations and Warranties................................31
ii
(b) Covenants.....................................................32
(c) Acceleration..................................................32
(d) Loan Documents................................................32
(e) Voluntary Bankruptcy..........................................32
(f) Involuntary Bankruptcy........................................32
(g) Seizure of Assets.............................................33
(h) Judgments.....................................................33
(i) Liens.........................................................33
(j) Casualty Loss.................................................33
(k) Qualified Audit Report........................................33
(l) Change of Control.............................................33
10. Remedies...............................................................33
11. Surrender of Superseded Documents......................................34
12. Miscellaneous..........................................................34
(a) Waivers.......................................................34
(b) Delays........................................................35
(c) Notices.......................................................35
(d) Set-Off.......................................................35
(e) Jurisdiction..................................................35
(f) Execution.....................................................36
(g) Governing Law.................................................36
(h) Fees; Indemnification.........................................36
(i) Binding Nature................................................36
(j) Under Seal....................................................36
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EXHIBITS
Exhibit A Restated First Line of Credit Note
Exhibit B Restated Second Line of Credit Note
Exhibit C Borrowing Base Certificate
iv
SCHEDULES
Schedule 5(a) Jurisdictions of Business Qualification of the Borrower
Schedule 5(b) Required Consents and Approvals
Schedule 5(c) Governmental Approvals; Required Licenses, Permits,
Certificates and Governmental Authorizations
Schedule 5(e) Assets and Properties; Liens
Schedule 5(g) Insurance
Schedule 5(h) Litigation and Other Proceedings
Schedule 5(i) Labor Matters
Schedule 5(n) Investments
Schedule 5(p) Equity Structure of Borrower
Schedule 5(q) Indebtedness for Money Borrowed
Schedule 5(r) Patents and Trademarks
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CITIZENS BANK
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December 31, 2001
▇▇▇▇▇ ▇. ▇▇▇▇▇, President and
Chief Executive Officer
National Dentex Corporation
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 2001 Amended and Restated Loan Agreement (Sixth Amendment)
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Dear ▇▇. ▇▇▇▇▇:
Reference is hereby made to a certain letter agreement dated May 3, 1990
between State Street Bank and Trust Company ("State Street"), as predecessor to
Citizens Bank (the "Bank") as lender under the credit facility provided for
herein, and National Dentex Corporation, a Massachusetts corporation (the
"Borrower"), as amended by a letter agreement between the Borrower and State
Street dated March 12, 1991, a letter agreement between the Borrower and State
Street dated February 27, 1992, a letter agreement between the Borrower and
State Street dated February 22, 1993, a letter agreement between the Borrower
and State Street dated June 17, 1994, and a letter agreement between the
Borrower and State Street dated June 27, 1997 (as so amended, the "Loan
Agreement"), pursuant to which State Street agreed to provide the Borrower with
a credit facility of up to $12,000,000. The credit facility consisted of a
$4,000,000 line of credit and an $8,000,000 acquisition line of credit.
State Street assigned to the Bank, and the Bank accepted, all of State
Street's rights and obligations under the Loan Agreement and the promissory
notes relating thereto, and the Bank became the lender under the Loan Agreement.
The Borrower has requested that the maturity of the lines of credit be
extended and that certain covenants and other terms of the Loan Agreement be
amended. The Bank is willing to grant such financial accommodations and to amend
and restate the Loan Agreement, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrower and the Bank hereby agree to amend
and restate the Loan Agreement (as amended and restated herein, the
"Restatement") to read in its entirety as follows:
1. THE CREDIT FACILITY; ADVANCES.
(a) THE CREDIT FACILITY. The Credit Facility shall consist of the
following:
(i) a revolving line of credit (the "First Line of Credit") in an
amount equal to the lesser of (A) $4,000,000 or (B) the Borrowing Base (as
hereinafter defined), available until, and due and payable on, the Termination
Date (as hereinafter defined); the First Line of Credit shall include a sublimit
for the issuance, on the terms and conditions set forth in this Restatement, of
letters of credit for the Borrower's account, PROVIDED that the Bank's LC
Exposure (as hereinafter defined) at any time shall not exceed $1,500,000.
Advances under the First Line of Credit may be used by the Borrower for its
general corporate purposes.
(ii) a term line of credit (the "Second Line of Credit") in an amount
equal to $8,000,000, available until the Termination Date. (The First Line of
Credit and the Second Line of Credit may collectively hereinafter be referred to
as the "Lines of Credit.") The principal amount of each advance under the Second
Line of Credit shall be repaid in equal consecutive quarterly installments on
each Payment Date beginning on the first Payment Date following such advance,
each of which installments shall be in the amount of 1/20th of the advance, with
the entire unpaid principal balance of such advance absolutely due and payable
on the Termination Date. Advances under the Second Line of Credit may be used by
the Borrower solely to fund acquisitions by the Borrower in accordance with
Section 8 and the other terms and conditions hereof.
(b) ADVANCES. After the Closing, advances under the Lines of Credit may be
made, from time to time, until the day prior to the Termination Date, in such
amounts as the Borrower may request; provided that in the case of the First Line
of Credit the aggregate principal amount of all advances at any time outstanding
under the First Line of Credit shall not exceed (i) $4,000,000 or (ii) the
Borrowing Base, whichever is less, minus the Bank's LC Exposure at such time,
and in the case of the Second Line of Credit, each advance must be in an amount
of at least $1,000,000 and the aggregate amount of all advances made under the
Second Line of Credit shall not exceed $8,000,000. Subject to the terms of this
Restatement, advances under the First Line of Credit, once repaid, may be
reborrowed; advances under the Second Line of Credit, once repaid, may not be
reborrowed. If at any time the outstanding principal amount of the advances
under a Line of Credit exceeds the amount determined by reference to the formula
set forth in the first sentence of this Section 1(b), the Borrower shall
promptly pay an amount equal to such excess to the Bank.
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2. INTEREST; PAYMENTS; FEES; BORROWING.
(a) INTEREST. Each advance, from time to time, under either Line of
Credit shall bear interest either (i) at an annual rate equal to the Prime Rate
(as hereinafter defined) minus 0.5% (in which case such advance shall be
designated as a "Prime Rate loan") or (ii) at the option of the Borrower, at the
LIBOR Lending Rate for the applicable Interest Period plus 1.5% (in which case
such advance shall be designated as a "LIBOR Rate loan"). If any such interest
rate is unlawful, then the rate shall be the highest rate permitted under
applicable law. Any amounts overdue under this Restatement shall bear interest
at the annual rate (the "Post-Default Rate") of 2% above the Prime Rate, or, if
such rate is unlawful, the highest rate permitted under applicable law. Interest
shall be payable (i) in the case of Prime Rate loans, in arrears on the first
Business Day of each month, (ii) in the case of LIBOR Rate loans, on the
Interest Payment Dates applicable thereto and (iii) in the case of any advance,
when such advance shall be due (whether at maturity, by reason of prepayment or
acceleration or otherwise) or converted, but only to the extent then accrued on
the amount so due or converted. Interest at the Post-Default Rate shall be
payable on demand. Each change in the rate of interest payable on the Prime Rate
loans shall take effect simultaneously with the corresponding change in the
Prime Rate.
(b) PAYMENTS. All payments received by the Bank from the Borrower,
except for the payments referred to in Subsection (c) below, shall be applied
first to expenses due hereunder, then to accrued interest and then to principal.
Upon the occurrence of an Event of Default hereunder, however, payments may be
applied in such manner as the Bank may, in its sole discretion, determine. All
computations of interest shall be made on the basis of a 360-day year. Advances
under the Lines of Credit shall be evidenced by this Restatement, the records of
the Bank and, with respect to the First Line of Credit, a promissory note in the
form of Exhibit A hereto (the "Restated First Line of Credit Note") and, with
respect to the Second Line of Credit, one or more installment promissory notes,
each due on the Termination Date, in the form of Exhibit B hereto (each a
"Restated Second Line of Credit Note") (references in this Restatement to the
term "Line of Credit Note" shall, except where the context does not otherwise
permit, be deemed to apply to both the Restated First Line of Credit Note and
the Restated Second Line of Credit Notes). The LC Reimbursement Obligations
shall be evidenced by this Restatement, the records of the Bank and the Letters
of Credit. The records of the Bank shall be prima facie evidence of the advances
hereunder and the LC Reimbursement Obligations and, in each case, of accrued
interest thereon and of all payments made in respect thereof.
All payments due to the Bank hereunder or under the Line of Credit Notes
shall be made in U.S. Dollars in immediately available funds at Citizens Bank,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ or at such other address as the
Bank may designate by notice the Borrower. A payment to the Bank shall not be
deemed to have been made on any day unless such payment shall have been received
by the Bank, at such address, in U.S. Dollars in immediately available funds, no
later than 12:00 noon (Boston time) on such day.
(c) ADDITIONAL PAYMENTS. In addition to the amounts specified above,
the Borrower shall pay to the Bank the following in connection with the Credit
Facility:
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(i) a credit facility extension fee of $10,000, payable at the
Closing;
(ii) an unused facility fee equal to 1/4 of 1% per annum of the
average unborrowed portion of the First Line of Credit (giving effect, without
duplication, to the Bank's LC Exposure thereunder), such average to be computed
for the three-month period preceding each Payment Date on which such unused
facility fee is payable (or such longer or shorter period as has elapsed from
the Closing Date to the first of such Payment Dates), payable in arrears on
January 2, 2002 and on each Payment Date thereafter through the Termination Date
(with the last such fee payable on the Termination Date);
(iii) a draw fee equal to 3/8 of 1% of each advance under the
Second Line of Credit, payable at the time of such advance;
(iv) a Letter of Credit issuance fee equal to 1% of the original
face amount of each Letter of Credit issued hereunder, payable at the time of
issuance of such Letter of Credit; and
(v) an audit fee of $1,000 for each field audit of the
Borrower's books and records performed by the Bank, up to a maximum of $1,000 in
audit fees for each 12-month period.
(d) NOTICE OF BORROWING. Whenever the Borrower elects to obtain a
LIBOR Rate loan hereunder, it may request that the Bank provide quotes as of any
specified date as to the LIBOR Lending Rate for any or all Interest Periods, and
the Bank shall promptly provide such quotes. The Borrower shall give the Bank
prior telecopied or telephone notice, on a Business Day, (i) not later than
10:00 a.m. (Boston time) on the day of any advance with respect to a Prime Rate
loan and (ii) not later than 10:00 a.m. (Boston time) at least two (2) and not
more than five (5) Business Days prior to the day of any advance with respect to
a LIBOR Rate loan. Each such notice shall be irrevocable once given and shall
specify the principal amount of the advance to be made, the date of the advance
(which shall be a Business Day), whether each advance is to be maintained as a
Prime Rate loan or a LIBOR Rate loan, and in the case of a LIBOR Rate loan, the
Interest Period applicable thereto. If such notice is given by telephone, it
shall be immediately confirmed in writing. In the event that the Borrower at any
time fails in such notice to specify any of the information required by this
subsection to be given with respect to LIBOR Rate loan, then the Borrower shall
be deemed to have requested that the Bank make a Prime Rate loan. All advances
hereunder shall be disbursed by the Bank not later than 12:00 noon (Boston time)
on the requested date therefor, in U.S. Dollars in immediately available funds,
by credit to the Borrower's operating account with the Bank.
(e) SPECIAL PROVISIONS GOVERNING LOANS. Notwithstanding any other
provisions of this Restatement to the contrary, the following provisions shall
govern with respect to any LIBOR Rate loans:
(i) REPAYMENT, CONTINUATION AND CONVERSION. Each LIBOR Rate loan
shall mature and become payable in full on the last day of the Interest Period
relating to such
4
LIBOR Rate loan. Upon maturity, a LIBOR Rate loan may be continued for an
additional Interest Period or may be converted to a Prime Rate loan as provided
in clause (ii) below.
(ii) CONTINUATION AND CONVERSION ELECTIONS. Subject to the
provisions hereof, the Borrower shall have the option (A) to convert at any time
one or more integral multiples of $500,000 of its outstanding Prime Rate loans
under the First Line of Credit into one or more LIBOR Rate loans, (B) to convert
at any time one or more integral multiples of $1,000,0000 of its outstanding
Prime Rate loans under the Second Line of Credit into one or more LIBOR Rate
loans, (C) effective on and as of the expiration date of the Interest Period of
a LIBOR Rate loan, to continue such LIBOR Rate loan as a LIBOR Rate loan with an
equivalent or different Interest Period, or (D) effective on and as of the
expiration date of the Interest Period of a LIBOR Rate loan, to convert such
LIBOR Rate loan to a Prime Rate loan; PROVIDED, HOWEVER, that (x) a LIBOR Rate
loan may only be continued pursuant to clause (C) above if the outstanding
principal amount of such LIBOR Rate loan equals or exceeds $500,000 in the case
a LIBOR Rate loan advanced under the First Line of Credit, or $1,000,000 in the
case of a LIBOR Rate loan advanced under the Second Line of Credit; (y) no
portion of the outstanding principal amount of any advance may be converted to,
or continued as, a LIBOR Rate loan when any Default or Event of Default has
occurred and is continuing; and (z) no portion of the outstanding principal
amount of any LIBOR Rate loan may be converted to a LIBOR Rate loan of a
different duration if such LIBOR Rate loan relates to any Hedging Obligations
unless the maturity of the relevant Hedging Obligations has been appropriately
adjusted in a manner satisfactory to the Bank. The Borrower shall deliver a
notice of conversion/continuation to the Bank, on a Business Day, no later than
10:00 a.m. (Boston time) at least two (2) and not more than five (5) Business
Days in advance of the proposed conversion/continuation date. A notice of
conversion/continuation shall, in the case of a conversion to, or continuation
of, a LIBOR Rate loan, be irrevocable and shall be given by the Borrower to
specify (i) the proposed conversion/continuation date (which shall be a Business
Day), (ii) whether the loan to be converted/continued is a First or Second Line
of Credit loan, (iii) the amount of the First or Second Line of Credit loan to
be converted/continued, (iv) (A) whether the First or Second Line of Credit loan
to be converted/continued is a Prime Rate loan or a LIBOR Rate loan, and (B)
whether the First or Second Line of Credit loan into which such First or Second
Line of Credit loan is converted/continued is to be a Prime Rate loan or a LIBOR
Rate loan, and (v) in the case of a conversion to, or a continuation of, a LIBOR
Rate loan, the requested Interest Period. In lieu of delivering the
above-described notice, the Borrower may give the Bank telephonic notice by the
required time of any proposed conversion/continuation; PROVIDED that such notice
shall be immediately confirmed in writing. If the Borrower fails to give such
notice with respect to a LIBOR Rate loan at least two (2) Business Days before
the last day of the then current Interest Period with respect thereto, the
Borrower shall be deemed to have delivered to the Bank a notice to convert such
LIBOR Rate loan into a Prime Rate loan and such LIBOR Rate loan shall, on such
last day, automatically convert into a Prime Rate loan. Any notice of
conversion/continuation given pursuant to this subsection shall be irrevocable
on and after the date of delivery thereof to the Bank, and the Borrower shall be
bound to convert or continue in accordance therewith.
5
(iii) DETERMINATION AND NOTICE OF LIBOR LENDING RATE. Promptly
after receipt of notice from the Borrower that it wishes to elect a LIBOR Rate
loan, the Bank shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the applicable LIBOR
Lending Rate, which rate shall apply to the LIBOR Rate loans for which an
interest rate is then being determined for the applicable Interest Period, and
shall promptly give notice thereof (in writing or by telephone and confirmed in
writing) to the Borrower.
(iv) BASIS FOR DETERMINING INTEREST RATE INADEQUATE. If the Bank
shall have determined that:
(A) U.S. Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Bank in the London interbank
market,
(B) by reason of circumstances affecting the Bank in the
London interbank market, adequate means do not exist for ascertaining the LIBOR
Lending Rate applicable hereunder to LIBOR Rate loans of any duration, or
(C) the LIBOR Lending Rate no longer adequately reflects
the Bank's cost of funding LIBOR Rate loans of any duration, then, upon notice
from the Bank to the Borrower and until the Bank shall notify the Borrower that
the circumstances causing such suspension no longer exist, (1) the obligations
of the Bank under this Restatement to make or continue any loans as, or to
convert any loans into, LIBOR Rate loans of such duration shall forthwith be
suspended and (2) each affected outstanding LIBOR Rate loan shall be converted
into a Prime Rate loan on the last day of the then current Interest Period
applicable thereto.
(v) LIBOR RATE LENDING UNLAWFUL. If the Bank shall determine
(which determination shall, upon notice thereof to the Borrower, be conclusive
and binding on the Borrower, absent manifest error) that the introduction of or
any change in or in the interpretation of any law, rule, regulation or guideline
(whether or not having the force of law) makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for the Bank to
make, continue or maintain any LIBOR Rate loan as, or to convert any loan into,
a LIBOR Rate loan of a certain duration, the obligations of the Bank to make,
continue, maintain or convert into any such LIBOR Rate loans shall, upon such
determination, forthwith be suspended until the Bank shall notify the Borrower
that the circumstances causing such suspension no longer exist, and all LIBOR
Rate loans of such type shall automatically convert into Prime Rate loans on the
last day of the then current Interest Periods applicable thereto or sooner, if
required by such law or assertion.
(vi) VOLUNTARY PREPAYMENT OF LIBOR RATE LOANS. LIBOR Rate loans
in connection with which the Borrower has entered into Hedging Obligations with
the Bank may not be prepaid; other LIBOR Rate loans may be prepaid only upon the
terms and conditions set forth herein. The Borrower shall give the Bank, no
later than 10:00 a.m. (Boston time), at least
6
four (4) Business Days' notice of any proposed prepayment of any LIBOR Rate
loans, specifying the proposed date of payment of such LIBOR Rate loans, and the
principal amount to be paid. Each partial prepayment of the principal amount of
LIBOR Rate loans shall be in an integral multiple of (x) $500,000 in the case of
LIBOR Rate loans advanced under the First Line of Credit and (y) $1,000,000 in
the case of LIBOR Rate loans advanced under the Second Line of Credit, and
accompanied by the payment of all charges outstanding on such LIBOR Rate loans
and of all accrued interest on the principal repaid to the date of payment.
Borrower acknowledges that prepayment or acceleration of a LIBOR Rate loan
during an Interest Period shall result in the Bank incurring additional costs,
expenses and/or liabilities and that it is extremely difficult and impractical
to ascertain the extent of such costs, expenses and/or liabilities. Therefore,
all full or partial prepayments of LIBOR Rate loans shall be accompanied by, and
the Borrower hereby promises to pay, on each date a LIBOR Rate loan is prepaid
or the date all sums payable hereunder become due and payable, by acceleration
or otherwise, in addition to all other sums then owing, an amount (the "LIBOR
Prepayment Fee") determined by the Bank pursuant to the following formula:
(1) the then current rate for U.S. Treasury securities
(bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the
end of the Interest Period as to which prepayment is
made, SUBTRACTED FROM
(2) the LIBOR Lending Rate applicable to the LIBOR Rate
loan being prepaid, PLUS 1.5%.
If the result of this calculation is zero or a negative number, then
there shall be no LIBOR Prepayment Fee. If the result of this
calculation is a positive number, then the resulting percentage shall
be multiplied by:
(3) the amount of the LIBOR Rate loan being prepaid.
The resulting amount shall be divided by:
(4) 360
and multiplied by:
(5) the number of days remaining in the Interest Period as
to which the prepayment is being made.
Said amount shall be reduced to present value calculated by using the
referenced U.S. Treasury securities rate and the number of days
remaining on the Interest Period for the LIBOR Rate loan being
prepaid.
The resulting amount of these calculations shall be the LIBOR Prepayment
Fee.
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(vii) INDEMNITIES. In addition to the LIBOR Prepayment Fee, the
Borrower agrees to reimburse the Bank (without duplication) for any increase in
the cost to the Bank, or reduction in the amount of any sum receivable by the
Bank, in respect, or as a result of:
(A) any conversion or repayment or prepayment of the
principal amount of any LIBOR Rate loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to Section
2(e)(vi) or otherwise;
(B) any loan not being made as a LIBOR Rate loan in
accordance with the borrowing request therefor;
(C) any LIBOR Rate loan not being continued as, or
converted into, a LIBOR Rate loan in accordance with the continuation/conversion
notice therefor, or
(D) any costs associated with marking to market any Hedging
Obligations that (in the reasonable determination of the Bank) are required to
be terminated as a result of any conversion, repayment or prepayment of the
principal amount of any LIBOR Rate loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to Section
2(e)(vi) or otherwise.
The Bank shall promptly notify the Borrower in writing of the occurrence of
any such event, such notice to state, in reasonable detail, the reasons therefor
and the additional amount required fully to compensate the Bank for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower to the Bank within five (5) days of its receipt of such notice, and
such notice shall, in the absence of manifest error, be conclusive and binding
on the Borrower. The Borrower understands, agrees and acknowledges the
following: (i) the Bank does not have any obligation to purchase, sell and/or
match funds in connection with the use of the LIBOR Rate as a basis for
calculating the rate of interest on a LIBOR Rate loan; (ii) the LIBOR Rate may
be used merely as a reference in determining such rate; and (iii) the Borrower
has accepted the LIBOR Rate as a reasonable and fair basis for calculating such
rate, the LIBOR Prepayment Fee, and other funding losses incurred by the Bank.
Borrower further agrees to pay the LIBOR Prepayment Fee and other funding
losses, if any, whether or not the Bank elects to purchase, sell and/or match
funds.
(viii) INCREASED COSTS. If on or after the date hereof the
adoption of any applicable law, rule or regulation or guideline (whether or not
having the force of law), or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(A) shall subject the Bank to any tax, duty or other charge
with respect to its LIBOR Rate loans or Letters of Credit issued by it or its
obligation to make LIBOR Rate loans or issue Letters of Credit, or shall change
the basis of taxation of payments to the
8
Bank of the principal of or interest on its LIBOR Rate loans or any other
amounts due under this Restatement in respect of its LIBOR Rate loans or the
Letters of Credit or its obligation to make LIBOR Rate loans or issue Letters of
Credit (except for the introduction of, or change in the rate of, tax on the
overall net income of the Bank or franchise taxes, imposed by the jurisdiction
(or any political subdivision or taxing authority thereof) under the laws of
which the Bank is organized or in which the Bank's principal executive office is
located); or
(B) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System of
the United States) against assets of, deposits with or for the account of, or
credit extended by, the Bank or shall impose on the Bank or on the London
interbank market any other condition affecting its LIBOR Rate loans or Letters
or Credit issued by it or its obligation to make LIBOR Rate loans or issue
Letters of Credit;
and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining any LIBOR Rate loan or issuing any Letter of Credit, or to
reduce the amount of any sum received or receivable by the Bank under this
Restatement with respect thereto, by an amount deemed by the Bank to be
material, then, within fifteen (15) days after demand by the Bank, the Borrower
shall pay to the Bank such additional amount or amounts as will compensate the
Bank for such increased cost or reduction. A statement of the Bank as to any
such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, the Bank may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
(f) INCREASED CAPITAL COSTS. If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required or
expected to be maintained by the Bank, or person controlling the Bank, and the
Bank determines (in its sole and absolute discretion) that the rate of return on
its or such controlling person's capital as a consequence of its commitments or
the loans made or Letters of Credit issued by the Bank is reduced to a level
below that which the Bank or such controlling person could have achieved but for
the occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Bank to the Borrower, the Borrower shall immediately pay
directly to the Bank additional amounts sufficient to compensate the Bank or
such controlling person for such reduction in rate of return. A statement of the
Bank as to any such additional amount or amounts (including calculations thereof
in reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower. In determining such amount, the Bank may use any method
of averaging and attribution that it (in its reasonable discretion) shall deem
applicable.
(g) TAXES. All payments by the Borrower of principal of, and interest
on, the loans and all other amounts payable hereunder shall be made free and
clear of and without
9
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by the Bank's net income or receipts (such
non-excluded items being called "Taxes"). In the event that any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrower will:
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Bank an official receipt or other
documentation satisfactory to the Bank evidencing such payment to such
authority; and
(iii) pay to the Bank such additional amount or amounts as are
necessary to ensure that the net amount actually received by the Bank will equal
the full amount the Bank would have received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Bank with respect
to any payment received by the Bank hereunder, the Bank may pay such Taxes and
the Borrower will promptly pay such additional amount (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
the Bank after the payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount the Bank would have received had such Taxes not
been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Bank the required receipts or other required
documentary evidence, the Borrower shall indemnify the Bank for any incremental
Taxes, interest or penalties that may become payable by the Bank as a result of
any such failure.
3. LETTERS OF CREDIT.
(a) ISSUANCE. The Bank agrees, on the terms and conditions set forth
in this Restatement, to issue letters of credit hereunder (each a "Letter of
Credit") at the request of the Borrower from time to time prior to the date that
is 30 days before the Termination Date; provided that, immediately after each
such Letter of Credit is issued, (i) the LC Exposure shall not exceed
$1,500,000, and (ii) the sum of the outstanding principal amount of all First
Line of Credit loans plus the LC Exposure shall not exceed $4,000,000.
(b) NOTICE OF PROPOSED ISSUANCE. With respect to each Letter of
Credit, the Borrower shall give the Bank at least two (2) Business Days' prior
notice (i) specifying the date such Letter of Credit is to be issued and (ii)
describing the proposed terms of such Letter of Credit and the nature of the
transactions to be supported thereby.
(c) CONDITIONS TO ISSUANCE. The Bank shall not issue any Letter of
Credit unless:
10
(i) such Letter of Credit shall be reasonably satisfactory in
form and substance to the Bank,
(ii) the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as the Bank shall
have reasonably requested, and
(iii) the conditions specified in Sections 7 and 8 shall have
been satisfied at or prior to the time such Letter of Credit is to be issued.
(d) EXPIRY DATES. No Letter of Credit shall have an expiry date later
than the fifth Business Day before the Termination Date. Subject to the
preceding sentence, each Letter of Credit issued hereunder shall expire on or
before the anniversary of the date of such issuance; provided that the expiry
date of any Letter of Credit may be extended from time to time at the Borrower's
request and with the Bank's consent for a period not exceeding one year.
(e) DRAWINGS. If the Bank receives a demand for payment under any
Letter of Credit issued by it and determines that such demand should be honored,
the Bank shall (i) make such payment in accordance with the terms of such Letter
of Credit and (ii) promptly notify the Borrower as to the amount paid by the
Bank as a result of such demand and the date of such payment (an "LC Payment
Date").
(f) REIMBURSEMENT BY THE BORROWER. If any amount is drawn under any
Letter of Credit, the Borrower irrevocably and unconditionally agrees to
reimburse the Bank for such amount together with any and all reasonable charges
and expenses which the Bank may pay or incur relative to such drawing. Such
reimbursement shall be due and payable on the relevant LC Payment Date or the
date on which the Bank notifies the Borrower of such drawing, whichever is
later; provided that, if such notice is given after 12:00 noon (Boston time) on
the later of such dates, such reimbursement shall be due and payable on the next
following Business Day (the date on which it is due and payable being an "LC
Reimbursement Due Date").
In addition, the Borrower agrees to pay, on the applicable LC Reimbursement
Due Date, interest on each amount drawn under a Letter of Credit, for each day
from and including the date such amount is drawn to but excluding such LC
Reimbursement Due Date, at a rate per annum equal to the Prime Rate for such day
MINUS 0.5%. The Borrower also agrees to pay, on demand, interest on any overdue
amount (including any overdue interest) payable under this subsection (f), for
each day from and including the date when such amount becomes due to but
excluding the date such amount is paid in full, at a rate per annum equal to the
sum of the Prime Rate for such day PLUS 2.0% (or, if such rate is unlawful, the
highest rate permitted under applicable law).
(g) EXCULPATORY PROVISIONS. The obligations of the Borrower under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Bank, any beneficiary of any
Letter of Credit or any other person. The Borrower assumes all risks of the acts
or omissions of any beneficiary of any Letter of Credit with respect
11
to the use of such Letter of Credit by such beneficiary. Neither the Bank nor
any of its officers, directors, employees and agents shall be responsible for,
and the obligations of the Borrower to reimburse the Bank for drawings pursuant
to this Section 3 (other than obligations resulting solely from the gross
negligence or willful misconduct of the Bank) shall not be excused or affected
by, among other things, (i) the use which may be made of any Letter of Credit or
any acts or omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of documents presented under any
Letter of Credit or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) payment by the Bank against presentation of documents to it which
do not comply with the terms of the relevant Letter of Credit; or (iv) any
dispute between or among the Borrower, any beneficiary of any Letter of Credit
or any other person or any claims or defenses whatsoever of the Borrower or any
other person against any beneficiary of any Letter of Credit. The Bank shall not
be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit. Any action taken or omitted by the Bank in
connection with any Letter of Credit and the related drafts and documents, if
done without willful misconduct or gross negligence, shall be binding on the
Borrower and shall not place the Bank under any liability to the Borrower.
(h) INDEMNIFICATION BY BORROWER. The Borrower agrees to indemnify and
hold harmless the Bank from and against any and all claims, damages, losses,
liabilities, costs or expenses (including, without limitation, the reasonable
fees and disbursements of counsel) which the Bank may reasonably incur (or which
may be claimed against the Bank by any person whatsoever) by reason of or in
connection with any execution and delivery or transfer of, or payment or failure
to pay under, any Letter of Credit or any actual or proposed use of any Letter
of Credit; provided that the Borrower shall not be required to indemnify the
Bank for any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (i) the willful misconduct or gross
negligence of the Bank in determining whether a request presented under any
Letter of Credit issued by it complied with the terms of such Letter of Credit
or (ii) the Bank's failure to pay under any Letter of Credit issued by it after
the presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. Nothing in this subsection is intended to
limit the obligations of the Borrower under any other provision of this
Section 3.
4. DEFINITIONS. All defined terms used in this Restatement which are not
otherwise defined herein shall have the respective meanings assigned to them in
the Loan Documents. For purposes of this Restatement and of the Loan Documents,
the following additional definitions shall apply:
(a) The term "Account Debtor" shall mean the person obligated on an
Account Receivable.
(b) The term "Account Receivable" shall mean and include accounts
receivable and notes, drafts, acceptances and other instruments representing or
evidencing a right
12
to payment for goods sold or leased or for services rendered, whether or not
earned by performance.
(c) The term "Affiliated Person" shall mean any person or entity
controlling, controlled by or under common control with the Borrower.
(d) The term "Borrowing Base," as of any time, shall mean an amount
equal to the sum of the Security Value of Accounts Receivable PLUS the Security
Value of Inventory.
(e) The term "Business Day" shall mean:
(i) any day which is neither a Saturday or Sunday nor a legal
holiday on which commercial banks are authorized or required to be closed in
Boston, Massachusetts;
(ii) when such term is used to describe a day on which a
borrowing, payment, prepaying, or repaying is to be made in respect of any LIBOR
Rate loan, any day which is: (i) neither a Saturday or Sunday nor a legal
holiday on which commercial banks are authorized or required to be closed in New
York City; and (ii) a London Banking Day; and
(iii) when such term is used to describe a day on which an
interest rate determination is to be made in respect of any LIBOR Rate loan, any
day which is a London Banking Day.
(f) The term "Capital Expenditure" shall mean any payment made or
required to be made, directly or indirectly, by the Borrower or any of its
subsidiaries for the purpose of acquiring or constructing fixed assets, real
property or equipment which, in accordance with GAAP, would be added as a debit
to the fixed asset account of the Borrower or any of its subsidiaries,
including, without limitation, amounts paid or payable under any conditional
sale or other title retention agreement or under any lease or other periodic
payment agreement which is of such a nature that payment obligations of the
Borrower thereunder would be required by GAAP to be capitalized and shown as
liabilities on the consolidated balance sheet of the Borrower and its
subsidiaries.
(g) The term "Certified Account" shall mean an Account Receivable of
the Borrower which has been included in a Borrowing Base Certificate delivered
by the Borrower to the Bank pursuant to the provisions of Section 6(b) hereof.
(h) The term "Closing" shall mean a closing at which the Credit
Facility is to be amended and restated as reflected herein.
(i) The term "Closing Date" shall mean December 31, 2001.
(j) The term "Consolidated Adjusted EBITDA" for any fiscal period
shall mean an amount equal to Consolidated EBITDA for such fiscal period MINUS
the sum of any amounts attributable to any of the following for such fiscal
period: (i) income tax expense, (ii) Capital Expenditures funded internally by
the Borrower and its subsidiaries, (iii) cash dividends
13
or distributions in respect of the Borrower's capital stock, and (iv) payments
by the Borrower in respect of any repurchase, redemption, conversion or other
retirement of any of the Borrower's capital stock, all as determined in
accordance with GAAP to the extent applicable.
(k) The term "Consolidated EBITDA" for any fiscal period shall mean
an amount equal to Consolidated Net Income for such fiscal period, PLUS, to the
extent deducted in determining Consolidated Net Income for such fiscal period,
interest expense, income tax expense, depreciation expense and amortization
expense incurred by the Borrower and its subsidiaries, on a consolidated basis,
for such fiscal period, all as determined in accordance with GAAP. For purposes
of determining Consolidated EBITDA for a division or separate operation, there
shall be taken into account all income and expenses properly allocable to such
division or operation, including corporate overhead, administrative costs, taxes
and interest.
(l) The term "Consolidated Net Income" for any fiscal period shall
mean the net income or net loss, after deduction of or credit for applicable
income taxes, of the Borrower and its subsidiaries, as such net income or net
loss would be set forth on a consolidated income statement for such fiscal
period prepared in accordance with GAAP; PROVIDED that there shall be excluded
any items of gain which (i) are not ordinary by GAAP definition or (ii) are not
a result of ordinary operations, as determined in the Bank's sole discretion.
(m) The term "Consolidated Tangible Net Worth" on any date shall
mean, for the Borrower and its subsidiaries on a consolidated basis,
Shareholders' Equity on such date MINUS the sum of any amounts attributable to
any of the following: (i) goodwill, (ii) intangible items, including, but not
limited to, unamortized debt discount and expense, future income tax benefits,
patents, trade and service marks and names, copyrights and other intellectual
property, and organizational or research and development expenses except prepaid
expenses, (iii) reserves not already deducted from assets in determining
Shareholders' Equity, (iv) any equity investments in persons that are not
subsidiaries of the Borrower and (v) any write-up in the book value of assets
resulting from any revaluation thereof subsequent to December 31, 2000, all as
determined in accordance with GAAP.
(n) The term "Default" shall mean any condition or event that, with
the giving of notice or lapse of time, or both, would, unless cured or waived,
become and Event of Default.
(o) The term "Disqualified Account" shall mean a Certified Account in
respect of which any of the following events shall have occurred: (i) such
Certified Account shall have remained unpaid from the date of invoice for a
period of 90 days; (ii) a dispute between the Borrower and the Account Debtor
shall have arisen with respect thereto; (iii) any Account Debtor thereon shall
have become Insolvent; or (iv) the Bank in its sole discretion and at any time
shall deem the prospect of payment of such Certified Account to be impaired.
(p) The term "Disqualified Inventory" shall mean (i) all Inventory
other than gold and teeth, as such terms are commonly used in the dental
industry, and (ii) with respect to gold and teeth only, the following types of
Inventory: (1) finished goods which are obsolete, not in good condition, not of
merchantable quality or not saleable in the ordinary course of the
14
Borrower's business, or which are subject to defects which affect their market
value; (2) Inventory which the Bank determines to be unacceptable due to age,
type, category or quality, including without limitation work-in-process
Inventory; (3) Inventory in the possession of any person other than the
Borrower; and (4) Inventory which is not free of all liens or other claims of
all other persons.
(q) The term "Fixed Charge Coverage Ratio" shall mean as of the end
of any fiscal quarter of the Borrower the ratio of (x) Consolidated Adjusted
EBITDA for the period of four consecutive fiscal quarters ending with such
fiscal quarter to (y) the sum of (A) the aggregate amount of principal payments
of Indebtedness of the Borrower or any of its subsidiaries scheduled to have
been made during such period PLUS (B) consolidated interest expense of the
Borrower and its subsidiaries for such period, determined in accordance with
GAAP.
(r) The term "GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect from time to time.
(s) The term "Hedging Obligation" shall mean all liabilities of the
Borrower to the Bank under interest rate swap agreements or any other agreements
or arrangements designed to protect the Borrower against fluctuations in
interest rates or currency exchange rates.
(t) The term "Indebtedness" shall mean, with respect to any person,
(i) all indebtedness or other obligations of such person for borrowed money or
for the deferred purchase price of property or services, (ii) all indebtedness
or other obligations of any other person for borrowed money or for the deferred
purchase price of property or services in respect of which such person is
liable, contingently or otherwise, to pay or advance money or property as
guarantor, endorser or otherwise (except as endorser for collection in the
ordinary course of business), or which such person has agreed to purchase or
otherwise acquire, and (iii) all lease obligations of such person which are
required, in accordance with GAAP, to be capitalized on the books of the lessee.
(u) The term "Indebtedness for Money Borrowed" on any date shall mean
(x) all outstanding Indebtedness of the Borrower or any of its subsidiaries,
current or funded, secured or unsecured, incurred in connection with borrowings
or the making available of credit or funds, (y) all Indebtedness of the Borrower
or any of its subsidiaries issued, incurred or assumed in respect of the
purchase price of property, except for trade accounts payable incurred in the
ordinary course of the Borrower's business consistent with the policies of the
Borrower on which interest is not being accrued and which are payable within 90
days of the statement date of such trade accounts payable, and which have not
been outstanding longer than 90 days from the statement date of such trade
accounts payable, and (z) all capitalized lease obligations (as defined by GAAP)
of the Borrower or any of its subsidiaries.
(v) The term "Insolvent" shall mean, with respect to any person, when
any of the following events shall have occurred in respect of such person:
death, dissolution, termination of existence, business failure, insolvency,
appointment of a receiver for any part of
15
the property of, an assignment for the benefit of creditors by, or a
commencement of any proceedings under any bankruptcy or insolvency law or any
law relating to the relief of debtors, readjustment of indebtedness,
reorganization, composition or extension by or against, such person.
(w) The term "Interest Period" shall mean, with respect to any LIBOR
Rate loan:
(i) initially, the period beginning on (and including) the date
on which such LIBOR Rate loan is made or continued as, or converted into, a
LIBOR Rate loan pursuant to Section 2(d) or Section 2(e)(ii) and ending on (but
excluding) the day which numerically corresponds to such date one, two, three,
six, nine or twelve months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in each case as the
Borrower may select in its notice pursuant to Section 2(d) or Section 2(e)(ii);
and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such LIBOR Rate loan and ending
one, two, three, six months, nine or twelve months thereafter, as selected by
the Borrower by irrevocable notice to the Bank not less than two Business Days
prior to the last day of the then current Interest Period with respect thereto;
PROVIDED, HOWEVER, that:
(A) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates occurring on
more than five (5) different dates;
(B) Interest Periods commencing on the same date for LIBOR
Rate loans comprising part of the same advance under this Restatement shall be
of the same duration;
(C) Interest Periods for LIBOR Rate loans in connection
with which Borrower has entered into a Hedging Obligation with the Bank shall be
of the same duration as the relevant periods set under such Hedging Obligation;
(D) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
following Business Day unless such day falls in the next calendar month, in
which case such Interest Period shall end on the first preceding Business Day;
(E) no Interest Period may end later than the Termination
Date; and
(F) no Interest period may be selected when a Default or an
Event of Default has occurred and is continuing.
16
(x) The term "Interest Payment Date" shall mean, with respect to any
LIBOR Rate loan having an Interest Period of three months or less, the last
Business Day of such Interest Period, and as to any LIBOR Rate loan having an
Interest Period longer than three months, each Business Day which is three
months, or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period.
(y) The term "Inventory" shall mean and include all goods,
merchandise, raw materials, supplies, work-in-process, finished goods and other
tangible personal property held by the Borrower for processing, sale or lease,
or furnished or to be furnished by the Borrower under contracts of services, or
to be used or consumed in the Borrower's business.
(z) The term "LC Exposure" shall mean, at any time, the sum, without
duplication, of (i) the aggregate amount that is (or may thereafter become)
available for drawing under all Letters of Credit outstanding at such time PLUS
(ii) the aggregate unpaid amount of all LC Reimbursement Obligations at such
time.
(aa) The term "LC Reimbursement Obligations" shall mean, at any time,
all obligations of the Borrower to reimburse the Bank for amounts paid by the
Bank in respect of drawings under Letters of Credit.
(bb) The term "LIBOR Rate" shall mean, with respect to any Interest
Period for any LIBOR Rate loan, the offered rate for deposits of U.S. Dollars in
an amount approximately equal to the amount of the requested LIBOR Rate loan for
a term coextensive with the designated Interest Period which the British
Bankers' Association fixes as its LIBOR rate and which appears on the Telerate
Page 3750 as of 11:00 a.m. London time on the day which is two (2) London
Banking Days prior to the beginning of such Interest Period.
(cc) The term "LIBOR Lending Rate" means, with respect to any LIBOR
Rate loan to be made, continued or maintained as, or converted into, a LIBOR
Rate loan for any Interest Period, a rate per annum for such Interest Period
determined pursuant to the following formula:
LIBOR RATE
LIBOR Lending Rate = ---------------------------------
(1.00 - LIBOR Reserve Percentage)
(dd) The term "LIBOR Reserve Percentage" shall mean, with respect to
any day of any Interest Period for LIBOR Rate loans, the maximum aggregate
(without duplication) of the rates (expressed as a decimal fraction) of reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) under any regulations of the Board of Governors
of the Federal Reserve System (the "Board") or other governmental authority
having jurisdiction with respect thereto as issued from time to time and then
applicable to assets or liabilities consisting of "Eurocurrency Liabilities," as
currently defined in Regulation D of the Board, having a term approximately
equal or comparable to such Interest Period.
17
(ee) The term "Loan Documents" shall mean (i) this Restatement and the
Line of Credit Notes, (ii) any agreement or agreements between the Borrower and
the Bank which give rise to any Hedging Obligations and (iii) all other
agreements, documents and instruments relating to, arising out of, or in any way
connected with any of the foregoing referred to in clauses (i) and (ii) above.
(ff) The term "London Banking Day" shall mean a day on which dealings
in U.S. Dollar deposits are transacted in the London interbank market.
(gg) The term "Payment Date" shall mean the first Business Day of each
April, July, October and January from and after the Closing Date.
(hh) The term "Prime Rate" shall mean the rate of interest quoted by
the Bank from time to time in Boston as its "Prime Rate," which is not
necessarily the Bank's lowest rate of interest.
(ii) The term "Security Value of Accounts Receivable", as of any date,
shall mean 80% of the amount owing as of that date on Certified Accounts
(exclusive of Disqualified Accounts). For such purpose, the amounts so owing on
Certified Accounts shall mean the face amounts of all Certified Accounts
(exclusive of Disqualified Accounts), less all payments thereon, all allowances,
adjustments, discounts and other credits applicable thereto and all amounts
owing by the Borrower to any Account Debtor thereon, all as determined by the
Bank in its reasonable discretion, which determination shall be final and
binding on the Borrower.
(jj) The term "Security Value of Inventory", as of any date, shall
mean the lesser of (a) $1,500,000, and (b) 50% of the book value of Inventory
(exclusive of Disqualified Inventory).
(kk) The term "Shareholders' Equity" on any date shall mean
stockholders' equity determined in accordance with GAAP.
(ll) The term "Termination Date" shall mean June 30, 2004.
5. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
as follows (with the following representations and warranties being deemed to
apply to each subsidiary of the Borrower on the same basis as which such
representations and warranties expressly apply to the Borrower):
(a) ORGANIZATION. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization; is duly qualified to do business and in good standing in each
jurisdiction in the United States of America where such qualification is
required, except those jurisdictions where the failure to so qualify will not
have a material adverse effect on the Borrower's business, prospects or
financial condition (a list of the jurisdictions where the Borrower is so
qualified being set forth on Schedule 5(a) hereto); and has all requisite
corporate power and authority to conduct its business as presently being
conducted and as proposed to be conducted after the Closing and to own its
properties now and
18
after the Closing; and the Borrower has all requisite corporate power and
authority to execute and deliver, and to perform all of its obligations under,
this Restatement and the other Loan Documents.
(b) AUTHORITY. The execution, delivery and performance by the
Borrower of this Restatement and the other Loan Documents to which it is a party
have been duly authorized by all necessary corporate action and do not
contravene any provision of the Borrower's charter or by-laws; do not require
any consents or approvals which have not been obtained (a list of any required
consents and approvals is set forth on Schedule 5(b) hereto); do not violate any
provision of any law, rule or regulation (including without limitation
Regulations T, U and X of the Board of Governors of the Federal Reserve System)
or any determination or award; do not and will not result in a breach or
constitute a default under any agreement to which the Borrower is a party or by
its properties are bound, including, without limitation, any indenture, loan or
credit agreement, lease, debt instrument or mortgage; or result in or require
the creation or imposition of any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature upon or with
respect to any of the Borrower's properties; and the Borrower is not in material
default under any law, rule or regulation, order, writ, judgment, injunction,
decree, determination, award, indenture, loan or credit agreement, lease, debt
instrument or mortgage referred to above or will not be in any such material
default by virtue of the transactions to be entered into at the Closing.
(c) APPROVALS. No authorization, consent, approval, license or
exemption of, or filing a registration with, any court or governmental
department or commission, board, bureau, agency or instrumentality, domestic or
foreign, is or will be necessary for the valid execution, delivery or
performance by the Borrower of this Restatement and the other Loan Documents to
which it is a party, other than filings which have already been made and
approvals which have already been received, a list of which is set forth on
Schedule 5(c) hereto. The Borrower is the lawful holder of all licenses,
permits, certificates and governmental authorizations required for the conduct
of its business, except where the failure to hold any such licenses, permits,
certificates or authorizations, individually or in the aggregate, would not have
a material adverse effect on the business, prospects, property or financial
condition of the Borrower and its subsidiaries as a whole. No such material
license, permit, certificate or other governmental authorization has been
revoked, cancelled, rescinded, modified, denied or lost and not reissued or
reinstated, and the Borrower has no reason to believe that any such material
license, permit, certificate or other governmental authorization will be
revoked, cancelled, rescinded, modified or lost.
(d) VALID OBLIGATIONS. This Restatement and the other Loan Documents
to which the Borrower is a party have been duly executed and delivered by the
Borrower and constitute legal, valid and binding obligations of the Borrower,
enforceable in accordance with their respective terms.
(e) ASSETS. Except as noted on Schedule 5(e), the Borrower has good
and clear marketable, record and insurable title to all of its assets and
properties, in each case subject to no mortgage, pledge, lien, lease,
encumbrance, charge, easement, restriction or encroachment.
19
(f) AGREEMENTS. The Borrower is not in default under or with respect
to any contractual obligation in any respect which could reasonably be expected
to be materially adverse to the business, operations, property or financial
condition of the Borrower and its subsidiaries as a whole, or which could
materially adversely affect the ability of the Borrower to perform its
obligations under this Restatement or any of the other Loan Documents.
(g) INSURANCE. Attached hereto as Schedule 5(g) is a complete and
accurate list of all insurance policies of the Borrower covering its properties
and assets as of the date hereof. The Borrower has previously delivered or, at
the request of the Bank, shall deliver on the Closing Date complete and accurate
copies of all insurance policies listed on Schedule 5(g). Upon issuance of any
insurance policy listed on Schedule 5(g) as applied for, the Borrower shall
deliver, at the request of the Bank, a complete and accurate copy of such policy
to the Bank; provided, however, that any policy so listed shall be delivered to
the Bank within 60 days following the Closing Date. Except policies listed as
applied for, all insurance policies listed on Schedule 5(g) are in full force
and effect, with the premiums due thereon paid, and the Borrower is not in
default with respect to any such policy. In addition, all such policies satisfy
the requirements set forth in Section 6(l) hereof.
(h) LITIGATION AND OTHER PROCEEDINGS. Except as set forth on Schedule
5(h) hereto, there are no actions, suits or proceedings pending or threatened
against the Borrower before any court or any governmental department,
commission, board, bureau, agency or instrumentality, and none of the actions,
suits or proceedings listed on Schedule 5(h) could reasonably be expected to be
materially adverse, either individually or in the aggregate, to the business,
properties, financial condition or prospects of the Borrower and its
subsidiaries as a whole.
(i) LABOR MATTERS. Except as set forth on Schedule 5(i) hereto, the
Borrower is not a party to any collective bargaining or similar agreement and
has complied in all material respects with all applicable state and federal laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours and other laws related to employment of employees of
the Borrower or its agents, and there are no arrears in the payment of wages,
withholding or social security taxes, unemployment insurance premiums or other
similar obligations of the Borrower other than in the ordinary course of
business.
(j) ERISA. No "prohibited transaction" or "accumulated funding
deficiency" or "reportable event" has occurred with respect to any "single
employer plan" of the Borrower. None of the Borrower, any predecessor to the
Borrower or any "commonly controlled entity" has ever been included in a
"multiemployer plan" as to which the Borrower or any "commonly controlled
entity" would have liability if the Borrower or any "commonly controlled entity"
were to withdraw therefrom (as each of the quoted terms is defined or used in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
the Internal Revenue Code of 1986, as amended (the "Code")).
(k) FINANCIAL STATEMENTS. The Borrower has delivered to the Bank (i)
consolidated financial statements of the Borrower and its consolidated
subsidiaries, including
20
consolidated balance sheets, statements of income and retained earnings and
statements of changes in financial position (collectively, the " 2000 Financial
Statements") for and as of the end of the fiscal year ended, December 31, 2000
and (ii) unaudited consolidated balance sheets and statements of income of the
Borrower and its consolidated subsidiaries for and as of the end of the fiscal
quarters ended, March 31, June 30 and September 30, 2001 (collectively, together
with the 2000 Financial Statements, the "Financial Statements"). The 2000
Financial Statements have been audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, certified public
accountants. The Financial Statements fairly present the consolidated financial
condition and performance and results of operation of the Borrower and its
consolidated subsidiaries for and as of the end of the periods presented, in
accordance with GAAP consistently applied (subject, in the case of the unaudited
Financial Statements, to normal year-end audit adjustments and the omission of
footnotes). Since December 31, 2000, (i) the physical assets and properties
owned or leased by the Borrower and its subsidiaries have not suffered any
material destruction or damage, regardless of whether or not any such loss was
insured, (ii) neither the Borrower nor any of its subsidiaries has incurred any
Indebtedness or liabilities, fixed, contingent or otherwise, other than in the
ordinary course of business, and (iii) there has not been a material adverse
change in the business or operations of the Borrower and its subsidiaries taken
as a whole.
(l) PROJECTIONS. The Borrower has delivered to the Bank certain
unaudited projections of the Borrower and its subsidiaries, including (i)
projected balance sheets, including projected balance sheets as of the end of
each fiscal quarter through December 31, 2001; (ii) projected results of
operations, including projected profit and loss statements for the end of each
fiscal quarter of the year ending December 31, 2001 and for the 12-month period
ending December 31, 2001 and (iii) projected cash flow statements, including
projected cash flow statements for each fiscal quarter through December 31, 2001
and for the 12-month period ending December 31, 2001. The projections have been
prepared in accordance with GAAP consistently applied with those used in the
preparation of the Financial Statements (subject to the addition of notes and,
in the case of interim projections, to recurring year-end adjustments). The
financial projections have been prepared using assumptions which the Borrower
believes in good faith to be reasonable, having a reasonable factual basis; and
such financial projections represent the good faith judgment of the management
of the Borrower as to the future financial results and condition of the Borrower
and its subsidiaries.
(m) TAXES. The Borrower has filed all federal and state tax returns
which are required to be filed and has paid all taxes shown on such returns and
on all assessments received by it, to the extent that such taxes have become
due. All of such tax returns are accurate and complete. All other taxes and
assessments of any nature with respect to which the Borrower is obligated and
which have become due are being paid or adequate accruals have been set up
therefor.
(n) INVESTMENTS. Except as set forth on Schedule 5(n), and except for
subsidiaries of the Borrower acquired by the Borrower pursuant to acquisitions
that either (i) are funded by one or more advances under a Line of Credit
pursuant to Section 8 hereof or (ii) are permitted under Section 6(k) hereof,
the Borrower does not own any securities or other equity or
21
debt interests in any corporation, partnership or other business entity. All of
the Affiliated Persons of the Borrower are set forth on Schedule 5(n).
(o) INVESTMENT COMPANY. The Borrower is not an "investment company"
or a company "controlled" by an "investment company" (as each of the quoted
terms is defined or used in the Investment Company Act of 1940, as amended).
(p) EQUITY STRUCTURE. The equity structure of the Borrower and each
of its subsidiaries, including each class of its capital stock and other
securities, is set forth on Schedule 5(p). Each of the Borrower's subsidiaries
is wholly-owned, directly or indirectly through one or more subsidiaries, by the
Borrower.
(q) INDEBTEDNESS FOR MONEY BORROWED. Attached as Schedule 5(q) hereto
is a list of all Indebtedness for Money Borrowed of the Borrower and its
subsidiaries, indicating, as applicable, the original principal amount of each
borrowing or debt, the current amount due thereon, the terms and schedule for
payments in respect thereof, and the security, if any, given therefor or in
connection therewith.
(r) PATENTS AND TRADEMARKS. Except as set forth on Schedule 5(r), the
Borrower does not own any trademarks or patents which are material in the
ordinary course of business as the Borrower's business is currently conducted or
as such business is contemplated to be conducted in the future.
(s) REPRESENTATIONS ACCURATE. No representation or warranty made by
the Borrower herein, in any other Loan Document or in any other certificate
furnished from time to time in connection herewith or therewith contains or will
contain any misrepresentation of a material fact or omits or will omit to state
any material fact necessary to make the statements herein or therein (taken as a
whole in conjunction with all such documents) not misleading when made. There is
no condition specific to the business of the Borrower which materially adversely
affects, or which would in the future materially adversely affect, the business,
operations, property or financial condition of the Borrower and its subsidiaries
as a whole.
6. COVENANTS. The Borrower incorporates herein all of the affirmative and
negative covenants contained in the other Loan Documents. In addition, the
Borrower represents, warrants, covenants and agrees as follows (and shall cause
each of its subsidiaries to comply with the following representations,
warranties, covenants and agreements on the same basis as which such
representations, warranties, covenants and agreements expressly apply to the
Borrower):
(a) PAYMENTS. The Borrower shall duly and punctually make the payments
required under this Restatement and the Line of Credit Notes and shall perform
and observe all of its other obligations under the Loan Documents.
(b) BORROWING BASE CERTIFICATE. The Borrower shall deliver to the Bank, at
least monthly, but as often as the Bank may request, a Borrowing Base
Certificate, substantially
22
in the form attached hereto as Exhibit C, together with the Accounts Receivable
Aging and Inventory Report (in the form of the attachment to Exhibit C hereto),
and such related information as the Bank may reasonably request.
(c) FINANCIAL REPORT. THE BORROWER WILL FURNISH TO THE BANK:
(i) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated subsidiaries as at the end of
such fiscal year and the related audited consolidated statements of income,
stockholders' equity and changes in financial position for such fiscal year, in
each case setting forth in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception or
qualification as to the scope of the audit, by independent certified public
accountants of nationally recognized standing, together with any letter from the
Borrower's management prepared in connection with the Borrower's annual audit
report;
(ii) as soon as available, but in any event within 30 days after the
end of each month in each fiscal year of the Borrower, copies of the unaudited
consolidated balance sheets of the Borrower and its consolidated subsidiaries as
at the end of such monthly period, together with the related unaudited
consolidated statements of income for such monthly period and for the portion of
the fiscal year of the Borrower through such monthly period, in each case
certified by the Chief Financial Officer of the Borrower as presenting fairly
the financial condition and results of operations of the Borrower and its
consolidated subsidiaries, in conformity with GAAP (subject to normal year-end
audit adjustments and to the fact that such financial statements may be
condensed and may not include footnotes); all such financial statements to be
complete and correct in all material respects and prepared in reasonable detail
and in conformity with GAAP applied consistently throughout the periods
reflected therein; and
(iii) as soon as available, but in any event not less than 14 days
prior to the end of each fiscal year of the Borrower, a projected balance sheet,
projected cash flow statement (including proposed Capital Expenditures) and
projected profit and loss statement of the Borrower and its consolidated
subsidiaries for the forthcoming fiscal year, in all cases setting forth such
financial information on a fiscal quarter by fiscal quarter basis for such
forthcoming fiscal year.
(d) OTHER FINANCIAL REPORTS. The Borrower will also furnish to the Bank:
(i) concurrently with the delivery of each set of the financial
statements referred to in paragraphs (i) and (ii) of Section 6(c), a certificate
of the President and Chief Financial Officer of the Borrower (i) stating that,
to the best of such persons' knowledge, during the period covered by such set of
financial statements the Borrower has observed or performed in all respects all
of its covenants and other agreements and satisfied in all material respects
every condition contained in this Restatement and the other Loan Documents to be
observed, performed or satisfied by it, and that such President and such Chief
Financial Officer have obtained no knowledge of any Default or Event of Default
(except as specified in such
23
certificate) and (ii) showing in detail the calculations supporting such
statement in respect of the covenants set forth in Sections 6(s) through 6(v)
hereof;
(ii) promptly after the same are sent and received, copies of all
financial statements, reports and notices which the Borrower sends to holders of
all classes of capital stock of the Borrower or which the Borrower receives from
such holders;
(iii) promptly, such additional financial and other information as the
Bank may from time to time reasonably request; and
(iv) as soon as available, a copy of each other report submitted to
the Borrower by its certified public accountants in connection with any annual,
interim or special audit made by them of the books of the Borrower.
(e) MAINTAIN RIGHTS. The Borrower shall:
(i) keep in full force and effect its corporate existence and all
material rights, licenses, leases and franchises reasonably necessary to the
conduct of its business;
(ii) duly observe and conform to all applicable material requirements
of all governmental authorities in any way relating to it or the conduct of its
business;
(iii) perform or comply with the terms and conditions of each material
contract, agreement or obligation to which it is a party;
(iv) keep true records and books of account;
(v) not engage in any business other than the dental laboratory
business in which it is now engaged and businesses reasonably related thereto;
and
(vi) not establish any subsidiaries, other than pursuant to
acquisitions that either (i) are funded by one or more advances under a Line of
Credit pursuant to Section 8 hereof, or (ii) are permitted under Section 6(k)
hereunder. All subsidiaries established or acquired by the Borrower or any of
its subsidiaries shall be wholly-owned, either directly or indirectly through
one or more other subsidiaries, by the Borrower.
(f) NO TRANSFERS. The Borrower shall not sell, lease, transfer or
otherwise dispose of any assets necessary for the effective or efficient
operation or proper maintenance of its business, except for (i) sales of
obsolete equipment in the ordinary course of business, and (ii) sales of
equipment in the ordinary course of business not to exceed $25,000 in any fiscal
year.
(g) NO MERGERS. The Borrower will not enter into any transaction of merger
or consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any material
part of its business, property or tangible or intangible assets, whether now
owned or hereafter acquired, or acquire, by purchase or otherwise, all or
24
substantially all of the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any person or entity other than
pursuant to (i) acquisitions that either (A) are funded by one or more advances
under a Line of Credit pursuant to Section 8 hereof, or (B) are permitted under
Section 6(k) hereunder or (ii) so long as no Default has occurred and is
continuing both before and after giving effect thereto, mergers between any
subsidiary of the Borrower with and into the Borrower or any other subsidiary of
the Borrower, provided that if the Borrower is a constituent party to any such
merger it shall be the surviving corporation of such merger.
(h) PAYMENT OF TAXES. The Borrower will promptly pay and discharge
all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profit or upon any property, real, personal or mixed,
belonging to it; provided, however, that the Borrower shall not be required to
pay any such tax, assessment, charge or levy if the same shall not at the time
be due and payable or can be paid thereafter without penalty or if the validity
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower shall have made adequate provision on its books for the
payment of such tax, assessment, charge or levy; and provided further, that such
tax or other sum shall be paid before it gives rise to a lien against the
property of the Borrower.
(i) GUARANTIES. The Borrower shall not become or be liable in respect
of any guaranty, except for guaranties in conjunction with an acquisition that
either (i) is funded by an advance under a Line of Credit pursuant to Section 8
hereof or (ii) is permitted under Section 6(k) hereunder, and endorsements by
the Borrower in the ordinary course of business of negotiable instruments for
deposit or collection.
(j) AGREEMENTS. The Borrower shall not enter into any agreement of
any nature whatsoever, including without limitation any agreement which
constitutes or effects a material modification of any agreement to which the
Borrower is a party as of the date hereof, other than in the ordinary course of
its business; provided, that, any such agreement which is entered into with an
Affiliated Person (i) shall be subject to the restriction on compensation set
forth in Section 6(r) below, (ii) shall be on an arms-length basis, and (iii)
shall be on terms and conditions no more favorable than the Borrower could
obtain from an unrelated third party.
(k) INVESTMENTS. The Borrower shall not make or permit to exist any
investments, directly or indirectly (in the form of any acquisition of assets
other than in the ordinary course of business or other than an acquisition of
the assets of an entity engaged in a dental laboratory business; or in the form
of any acquisition of stock, securities, indebtedness or obligation of, or any
loan, advance, capital contribution or transfer of property to, or any guarantee
or other commitment on behalf of, any person, other than pursuant to an
acquisition of the stock or business of an entity engaged in a dental laboratory
business; or otherwise), other than in (i) United States Treasury securities,
(ii) readily marketable direct obligations of the United States of America or
any agency thereof, backed by the full faith and credit of the United States,
(iii) certificates of deposit, time deposits or banker's acceptances with a
limit of $5,000,000 per institution issued by any of the top 50 financial
institutions in the United States of America or its territories, each having
total assets and surplus of at least $4,000,000,000, (iv)
25
commercial paper rated A1/P1 or better by Standard & Poor's Corporation/▇▇▇▇▇'▇
Investors Service, Inc., (v) repurchase agreements made against securities which
meet the qualifications stated herein, or (vi) tax-exempt securities, including
without limitation, municipal bonds or notes, rated A or better by ▇▇▇▇▇'▇
Investors Service, Inc.
(l) PROPERTY. The Borrower will keep all of its property reasonably
necessary for the continued operation of its business in good working order and
condition, reasonable wear and tear and, subject to Section 9 hereof, damage by
fire and other casualty excepted, and maintain with financially sound and
reputable insurance companies insurance thereon in at least such amounts and
with such deductibles and against at least such risks (including hazard) as are
usually insured against in the same general area by companies engaged in the
same or similar businesses; and the Borrower will furnish to the Bank, upon its
written request, full information with respect to any insurance carried.
(m) BOOKS AND RECORDS. The Borrower will (i) keep proper books of
record and account in which full, true and correct entries in conformity with
GAAP and all requirements of law shall be made of all dealings and transactions
in relation to its business and activities, and (ii) permit representatives of
the Bank to visit and inspect any of its properties and to examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired, and to discuss the business, operations,
properties and financial condition of the Borrower with its officers and
employees and with its independent certified public accountants.
(n) NOTICES. The Borrower will give notice to the Bank, within five
days of knowledge thereof, of:
(i) the occurrence of any Default or Event of Default under this
Restatement;
(ii) any default or event of default under any other contractual
obligation of the Borrower which, if not paid or remedied by the Borrower or
waived by the obligee thereon, could result in liability to the Borrower in
excess of $100,000 in any single instance or $250,000 in the aggregate;
(iii) any litigation, investigation or proceeding of which the
Borrower has knowledge which may exist at any time between the Borrower and any
governmental authority which may have a material adverse effect on the business,
operations, property or financial condition of the Borrower, any litigation or
proceeding affecting the Borrower which may have a material adverse effect upon
the Borrower, or any material adverse development in previously disclosed
litigation;
(iv) the following events, as soon as possible and in any event
within 15 days after the Borrower knows thereof: (x) the occurrence of any
"reportable event" with respect to any "single employer plan" which in the
reasonable judgment of the Borrower could be expected to have a material adverse
affect on the Borrower or its business, (y) the institution
26
of proceedings or the taking or expected taking of any other action by the
Borrower or any "commonly controlled entity" to terminate any "single employer
plan" with respect to which there exists any vested unfunded pension liabilities
at the time of such termination, or (z) the "reorganization" or "insolvency" of
any "multiemployer plan" which may reasonably be expected to have a material
adverse affect on the business, operations, property or financial condition of
the Borrower (as each of the quoted terms is defined or used in ERISA or the
Code);
(v) a material adverse change in the business, operations,
property or financial condition of the Borrower and its subsidiaries as a whole;
and
(vi) the revocation, expiration or loss of any license, permit or
other governmental authorization of the Borrower material to the conduct of the
business of the Borrower and its subsidiaries as a whole;
each notice pursuant to paragraphs (i) through (vi) of this Section 6(n) to be
accompanied by a statement of the President of the Borrower setting forth
details of the occurrence referred to therein and stating what action, if any,
the Borrower proposes to take with respect thereto.
(o) LIENS. The Borrower will not create, incur, assume or suffer to
exist any lien, mortgage or other encumbrance upon any of its property, assets
or revenues, whether now owned or hereafter acquired, except for:
(i) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like liens arising in the ordinary course of business in
respect of obligations not overdue for a period of more than 60 days or which
are being contested in good faith by appropriate proceedings;
(ii) easements, rights-of-way, restrictions, license rights,
leases and other similar encumbrances incurred in the ordinary course of
business which do not in any case materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the business
of the Borrower;
(iii) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under self-insurance
arrangements;
(iv) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(v) liens existing on the assets or properties of the Borrower
and identified on SCHEDULE 5(e) attached hereto;
(vi) purchase money liens securing additional Indebtedness
permitted under Section 6(q) hereof; and
27
(vii) liens securing the Borrower's obligations under operating
leases.
(p) MODIFICATIONS. The Borrower will not permit the modification or
waiver of or any change in any provisions of any agreement relating to
Indebtedness of the Borrower if such modification, waiver or change could have a
material adverse effect on the ability of the Borrower to perform its
obligations under this Restatement or the other Loan Documents (such effect to
be determined by the Bank in its sole discretion).
(q) ADDITIONAL INDEBTEDNESS. The Borrower shall not create, incur,
assume, agree to purchase or repurchase or provide funds in respect of or
otherwise become or be or remain liable with respect to any Indebtedness of any
type whatsoever owed to any person, except (i) with respect to any Indebtedness
incurred pursuant to the terms of this Restatement (including in conjunction
with an acquisition that is either funded by an advance under a Line of Credit
pursuant to Section 8 hereof or permitted under Section 6(k) hereof) or
outstanding on the date hereof and listed on Schedule 5(q) hereto; (ii)
obligations to make payments of money pursuant to so-called "earn-out"
agreements or other similar arrangements providing for the payment by the
Borrower of contingent consideration in connection with the acquisition of one
or more businesses; (iii) trade indebtedness incurred in the ordinary course of
the Borrower's business; and (iv) Indebtedness in respect of Capital
Expenditures not exceeding $100,000 in the aggregate during any 12-month period.
(r) PAYMENTS TO AFFILIATED PERSONS. The Borrower shall not make any
payment, compensation or distribution, directly or indirectly, whether in cash
or in property and whether in respect of stock ownership or employment,
management, consulting or other services or for any other reason whatsoever, to
any Affiliated Person, except that (i) the Borrower may (A) pay compensation in
the form of salary, fringe benefits and reimbursement for reasonable business
expenses to Affiliated Persons who are directors or officers of the Borrower in
the ordinary course of business and in a manner consistent with past practice,
(B) pay bonuses to such Affiliated Persons and (C) repurchase shares of the
Borrower's capital stock from such Affiliated Persons and (ii) any subsidiary of
the Borrower may pay dividends and make distributions to the Borrower; provided
that immediately prior to and after giving effect to any such bonus payment or
stock repurchase there exists no Default or Event of Default hereunder, and the
Bank receives a certificate to such effect signed by the President or Chief
Financial Officer of the Borrower.
(s) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The Borrower shall
maintain, as of the end of each fiscal quarter, Consolidated Tangible Net Worth
of at least $18,000,000, provided that such minimum Consolidated Tangible Net
Worth amount shall be increased as of the end of each fiscal year of the
Borrower ending after the Closing by an amount equal to twenty-five percent
(25%) of Consolidated Net Income for such fiscal year (which annual increase
shall, in any event, be not less than $500,000).
(t) FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit the
Fixed Charge Coverage Ratio as of the end of the end of any fiscal quarter to be
less than 1.5:1.
28
(u) CONSOLIDATED NET INCOME. The Borrower shall not permit
Consolidated Net Income for any fiscal quarter to be less than $500,000.
(v) CURRENT RATIO. The Borrower shall not permit the ratio of (x) the
current assets (including cash, Accounts Receivable and Inventory) of the
Borrower and its subsidiaries to (y) their current liabilities (including,
without duplication, (i) the current portion of any long-term obligations and
(ii) all outstanding Indebtedness owed by the Borrower to the Bank), determined
on a consolidated basis) to be less than 1:1 at any time.
7. CONDITIONS OF CLOSING. The obligation of the Bank to amend the Credit
Facility, as reflected herein, or to make additional advances under a Line of
Credit or to issue any Letter of Credit is subject to the satisfaction of all of
the following conditions on or prior to the Closing:
(a) LINE OF CREDIT NOTES. The Bank shall have received the Line of
Credit Notes, duly executed and delivered by the Borrower, each in form
satisfactory to the Bank and its special counsel.
(b) WARRANTIES AND COVENANTS. All warranties and representations of
the Borrower and its subsidiaries in this Restatement and the other Loan
Documents shall be true on the date of the Closing as if then given, the
Borrower and its subsidiaries shall have performed or observed all of the terms,
covenants, conditions and obligations under this Restatement and the other Loan
Documents which are required to be performed or observed by it on or prior to
such date, and on such date there shall exist no Default or Event of Default
hereunder.
(c) CLOSING CERTIFICATE. The Bank shall have received a certificate,
dated as of the Closing and executed by the President and the Chief Financial
Officer of the Borrower, in form and content satisfactory to the Bank, stating
the substance of the foregoing clause (b).
(d) FINANCIAL STATEMENTS. The Bank shall have received copies of the
unaudited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of September 30, 2001, together with the related unaudited
consolidated statements of income for such period and for the portion of the
fiscal year of the Borrower through such period, certified by the Chief
Financial Officer of the Borrower as presenting fairly the financial condition
and results of operations of the Borrower and its consolidated subsidiaries, in
conformity with GAAP (subject to normal year-end audit adjustments and to the
fact that such financial statements may be condensed and may not include
footnotes).
(e) ANNUAL REPORT. The Bank shall have received copies of the
Borrower's Annual Report on Form 10-K for the fiscal year ended December 31,
2000 and Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 2001.
(f) NO ADVERSE CHANGE. There shall have occurred no material adverse
change in the Borrower's business, prospects, properties or financial condition.
(g) CLOSING FEES AND LEGAL EXPENSES. At the Closing, the Borrower
shall have paid to the Bank all costs and expenses (including legal fees)
referred to in Section 12(h).
29
(h) LEGAL OPINIONS. All legal matters incident to this Restatement
shall be satisfactory to ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, special counsel to the Bank, and
the Bank shall have received at the Closing the legal opinion of Posternak,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel to the Borrower, each such opinion in form
and substance satisfactory to the Bank and its special counsel.
(i) PROJECTIONS. The Bank shall have received copies of the
Borrower's base line fiscal quarter by fiscal quarter projections for fiscal
year 2001, including profit and loss, balance sheet, cash flow and schedules
reflecting branch profit and losses.
(j) OTHER DOCUMENTS. The Bank shall have received all other documents
and assurances which it requires or which it may reasonably request in
connection with the transactions contemplated by this Restatement, and such
documents shall be certified, when appropriate, by the proper authorities or
corporate officers. All such documents and all proceedings to be taken in
connection with such transactions shall be satisfactory in form and substance to
the Bank and its special counsel.
8. CONDITIONS OF MAKING SUBSEQUENT ADVANCES. The obligation of the Bank
to make any advance under a Line of Credit or to issue any Letter of Credit is
subject to the satisfaction of the following conditions precedent on or before
the date of each such subsequent advance or issuance of a Letter of Credit (the
"Borrowing Date"):
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 5 hereof and otherwise made by the Borrower and
its subsidiaries in the Loan Documents shall have been correct as of the date on
which made and shall also be correct at and as of such Borrowing Date with the
same effect as if made at and as of such time, except as may have been disclosed
to the Bank by the Borrower and to which the Bank has consented and to the
extent that the facts upon which such representations and warranties are based
may in the ordinary course be changed by the transactions permitted or
contemplated hereby.
(b) PERFORMANCE. The Borrower and its subsidiaries shall have
performed and complied with all terms, conditions, covenants and obligations
under this Restatement and the other Loan Documents required to be performed or
complied with by it prior to or on such Borrowing Date, and on such Borrowing
Date there shall exist no Default or Event of Default hereunder.
Each request by the Borrower for an advance under a Line of Credit shall
constitute certification by the Borrower that the conditions specified in
Sections 8(a) and 8(b) will be duly satisfied on the date of such advance.
(c) ACQUISITIONS. If the proceeds of any such advance are to be used
to fund an acquisition by the Borrower, then the obligation of the Bank to make
any advance under any Line of Credit is subject to the satisfaction of the
following conditions precedent on or before the Borrowing Date for such advance:
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(i) The entity whose business, assets or stock is to be acquired
by the Borrower with funds from the requested advance must be primarily engaged
in the dental laboratory business or a business closely related thereto;
(ii) the Borrower shall have provided the Bank with a projected
consolidated pro forma balance sheet, a projected consolidated pro forma cash
flow statement (including proposed Capital Expenditures) and a projected
consolidated pro forma profit and loss statement of the Borrower and its
subsidiaries for the period ending on the last day of the first full fiscal year
following the date of the requested advance, in all cases setting forth such
financial information on a fiscal quarter by fiscal quarter basis for such
period and giving effect to such acquisition;
(iii) The Borrower shall have provided the Bank with evidence
satisfactory to the Bank in its sole discretion that the entity whose business,
assets or stock is to be acquired by the Borrower with funds from the requested
advance has historically generated recast positive cash flow; for purposes of
this provision, positive cash flow that is "recast" shall be determined by
calculating the acquired entity's net income by adjusting the amount of
depreciation and amortization incurred, any other non-cash charges,
non-recurring expenses, or excessive salaries incurred, and the manufacturing
costs to the level that the acquired entity would have incurred had it been
operated by the Borrower during such period;
(iv) immediately prior to, and after giving effect to, such
acquisition, no Default or Event of Default shall exist, and the Borrower shall
have provided the Bank with evidence satisfactory to the Bank demonstrating the
Borrower's compliance with all of its covenants and agreements under this
Restatement (including, but not limited to, its financial covenants set forth in
Sections 6(s) through (v)) both prior to such acquisition and on a pro forma
basis after giving effect to such acquisition; and
(v) the Borrower shall have provided the Bank with evidence
satisfactory to the Bank in its sole discretion that the acquisition to be
funded with the requested advance shall not have (1) a total purchase price,
whether payable in cash or other consideration, that exceeds $3,000,000, or (2)
a cash purchase price that exceeds $2,000,000, unless the Bank has given its
prior written approval.
9. EVENTS OF DEFAULT. Each of the following shall constitute an event of
default (an "Event of Default") under this Restatement, the Line of Credit Notes
and the other Loan Documents:
(a) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made by the Borrower or any of its subsidiaries in this Restatement or any other
Loan Document shall prove to have been incorrect in any material respect when
made, or any information furnished in writing, whether in this Restatement or
any other Loan Document, shall prove to be untrue in any material respect on the
date on which it is or was given.
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(b) COVENANTS. The Borrower or any of its subsidiaries shall fail to
perform or observe any covenant or condition contained or referred to in this
Restatement or any Line of Credit Note, including without limitation the failure
to make any payment of principal or interest on a Line of Credit Note when due
or any payment of any fee hereunder; provided, however, that failure to make any
payment of interest on a Line of Credit Note shall not constitute an Event of
Default under this Restatement until such failure shall have continued for five
(5) days after the same became due and payable; provided further that any
failure to perform under Sections 6(b), (c), (D), (l) and (m) hereof shall not
constitute an Event of Default under this Restatement until such failure shall
have continued uncured for ten (10) days.
(c) ACCELERATION. Any event occurs which permits the acceleration of
the maturity of any Indebtedness of the Borrower or any of its subsidiaries in
excess of $100,000 under any mortgage, deed of trust, security or loan
agreement, indenture, note or other undertaking; or any demand for payment is
made with respect to any Indebtedness of the Borrower or any of its
subsidiaries.
(d) LOAN DOCUMENTS. Any default or event of default shall occur under
any of the Loan Documents (other than a default of event of default that is
elsewhere specifically dealt with in this Section 9).
(e) VOLUNTARY BANKRUPTCY. The Borrower or any of its subsidiaries
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(f) INVOLUNTARY BANKRUPTCY. An involuntary case or other proceeding
shall be commenced against the Borrower or any of its subsidiaries seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days; or an order for relief shall be entered against the
Borrower or any of its subsidiaries under the federal bankruptcy laws as now or
hereafter in effect;
32
(g) SEIZURE OF ASSETS. There shall occur any seizure, vesting or
intervention by or under the authority of a governmental unit by which the
Borrower's management is displaced or its authority in the conduct of its
business is materially curtailed.
(h) JUDGMENTS. Any judgment, order or writ in excess of $100,000 is
rendered or entered against the Borrower or any of its subsidiaries and not
paid, satisfied or otherwise discharged within 60 days of the date such
judgment, order or writ becomes final and non-appealable.
(i) LIENS. A notice of lien, levy or assessment is filed or recorded
with respect to any material part of the assets of the Borrower and its
subsidiaries taken as a whole by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipality or other
governmental agency, or any taxes or debts owing at any time hereafter to any
one of them become a lien upon a material part of the assets of the Borrower and
its subsidiaries taken as a whole.
(j) CASUALTY LOSS. There shall occur any material casualty loss with
respect to a material part of the Borrower's or any subsidiary's assets.
(k) QUALIFIED AUDIT REPORT. Any audit report required pursuant to
Section 6 is not an unqualified audit report, unless the reason for
qualification is not material, as determined in the Bank's sole and absolute
discretion.
(l) CHANGE OF CONTROL. (i) Any person or group of persons acting
together (within the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended) shall have acquired at any time after the date hereof
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of more than thirty percent
(30%) of the common stock or other capital securities of the Borrower
outstanding at such time and (ii) and such person or group of persons (including
any designees or appointees of such person or group or person) shall hold or
control (whether by acting as a Director, by any voting agreement or arrangement
or otherwise) one-third (1/3) or more of the votes eligible to be cast by
Directors at any duly called meeting of the Board of Directors of the Borrower.
10. REMEDIES.
(a) Upon the occurrence and during the continuation of an Event of
Default under this Restatement, the Bank may exercise any one or more of the
following rights and remedies (all of which shall be cumulative):
(i) declare all or any part of the loans or other amounts
outstanding hereunder or under the Line of Credit Notes and the other Loan
Documents, together with all accrued interest thereon and all fees and expenses
related thereto, to be forthwith due and payable, whereupon the same shall
become forthwith due and payable, without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrower;
33
(ii) terminate the Lines of Credit, the Bank's obligations to
issue Letters of Credit hereunder, and any other financial accommodations or
commitments of the Bank provided for by this Restatement or the other Loan
Documents;
(iii) not extend the expiry date of any outstanding Letter of
Credit;
(iv) proceed with every remedy that is provided for herein or in
the other Loan Documents, or that the Bank may have under applicable law;
PROVIDED that, if any Event of Default specified in clause (e) or (f) of Section
9 occurs, then without any notice to the Borrower or any other act by the Bank,
the Lines of Credit, the Bank's obligations to issue Letters of Credit
hereunder, and any other financial accommodations or commitments provided for in
this Restatement or the other Loan Documents shall thereupon terminate and all
loans and other amounts outstanding hereunder or under the Line of Credit Notes
or the other Loan Documents, together with all accrued interest thereon and all
fees and expenses related thereto shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.
(b) Without limitation of any other right or remedy of the Bank, (i)
if an Event of Default shall have occurred and the Bank shall have demanded or
accelerated the loans outstanding under the Credit Facility or (ii) if this
Restatement and/or the Credit Facility described herein shall have expired or
shall have been earlier terminated by either the Bank or the Borrower for any
reason, the Borrower shall, promptly after it receives a request from the Bank,
deposit with the Bank in cash a sum equal to the total of all then undrawn
amounts under all outstanding Letters of Credit issued by the Bank for the
account of the Borrower, such cash deposit to serve as cash collateral for the
Borrower's reimbursement obligations in respect of such undrawn amounts under
such Letters of Credit; PROVIDED that, if any Event of Default specified in
clause (e) or (f) of Section 9 occurs, the Borrower shall deposit such amount
with the Bank forthwith without any notice or demand or any other act by the
Bank.
11. SURRENDER OF SUPERSEDED DOCUMENTS. At the Closing, subject to the
satisfaction of the conditions set forth herein, the Bank will deliver to the
Borrower (a) the Restated First Line of Credit Promissory Note dated June 27,
1997 in the original principal amount of $4,000,000 made by the Borrower in
favor of the Bank (or in favor of State Street and assigned to the Bank) (which
note shall be superseded by and restated in the form of the Restated First Line
of Credit Note as provided herein) and (b) the Second Line of Credit Promissory
Note dated June 27, 1997 in the original principal amount of $8,000,000 and any
and all other Second Line of Credit Promissory Notes under the Second Line of
Credit previously made by the Borrower in favor of the Bank (or in favor of
State Street and assigned to the Bank) (which notes shall be superseded by and
restated in the form of the Restated Second Line of Credit Note as provided
herein).
12. MISCELLANEOUS.
(a) WAIVERS. This Restatement and the other Loan Documents may not be
changed, waived, discharged or terminated orally or in writing, except that any
term of this Restatement or any other Loan Document may be amended and the
performance or observance
34
by the Borrower of any term of this Restatement or any other Loan Document may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the prior written consent of the Bank.
(b) DELAYS. No delay on the part of the Bank in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
partial exercise or waiver of any privilege or right hereunder preclude any
further exercise of such privilege or right or the exercise of any other right,
power or privilege. The rights and remedies expressed in this Restatement and in
the other Loan Documents are cumulative and not exclusive of any right or remedy
which the Bank may otherwise have. The Bank may release or surrender, exchange
or substitute any real estate or personal property, or both, or other collateral
security now or hereafter held as security for the payment of the Line of Credit
Notes or any other obligations of the Borrower to the Bank under this
Restatement or the other Loan Documents or however arising and may extend the
time for payment or otherwise modify the terms of payment of any part or the
whole of the Line of Credit Notes.
(c) NOTICES. Any notices, consents or other communications to be
given under this Restatement or under the other Loan Documents shall be in
writing and shall be deemed given when mailed to the respective parties by
overnight courier or by registered mail addressed as set forth on the first page
of this Restatement, with all such notices, consents and other communications to
the Bank to be sent to the attention of ▇▇▇▇▇▇▇ St. ▇▇▇▇, Vice President, or to
such other addresses as either party may from time to time designate for that
purpose. A copy of each notice to the Bank shall also by sent to the Bank's
special counsel, ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esquire. A copy of each
notice to the Borrower shall also be sent to the Borrower's counsel, Posternak,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C. Section headings and defined terms in this
Restatement and the other Loan Documents are included for convenience only and
are not intended to modify or define any term or provision of any such
instrument.
(d) SET-OFF. Regardless of the adequacy of any collateral, any
deposits, balances or other sums credited by or due from the Bank to the
Borrower or any of its subsidiaries may, at any time or from time to time,
without notice to the Borrower or any of its subsidiaries or compliance with any
other condition precedent now or hereafter imposed by statute, rule of law or
otherwise (all of which are hereby expressly waived), be set off, appropriated
and applied by the Bank against any or all such obligations in such manner as
the Bank in its sole discretion may determine.
(e) JURISDICTION. The Borrower, for itself and its subsidiaries,
irrevocably submits the jurisdiction of the courts of the Commonwealth of
Massachusetts and the United States District Court for the District of
Massachusetts for the purpose of any suit, action or other proceeding brought by
the Bank arising out of or relating to this Restatement or any other Loan
Document, and the Borrower, for itself and its subsidiaries, waives and agrees
not to assert by
35
way of motion, as a defense or otherwise in any such suit, action or proceeding,
any claim that the Borrower or any of its subsidiaries is not personally subject
to the jurisdiction of the courts of the Commonwealth of Massachusetts or the
United States District Court for the District of Massachusetts or that the
property of the Borrower or any of its subsidiaries is exempt or immune from
execution or attachment, either prior to judgment or in aid of execution, that
the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper, or that this Restatement or
any other Loan Document or the subject matter hereof or thereof may not be
enforced in or by such court.
(f) EXECUTION. This Restatement may be signed in any number of
counterparts, which together will be one and the same instrument. This
Restatement shall become effective whenever each party shall have signed at
least one such counterpart.
(g) GOVERNING LAW. This Restatement shall be governed by the laws of
the Commonwealth of Massachusetts and for all purposes shall be construed in
accordance with the laws of such Commonwealth.
(h) FEES; INDEMNIFICATION. Whether or not any funds are disbursed
hereunder, the Borrower shall pay all of the Bank's reasonable costs and
expenses in connection with the preparation, execution, delivery, review,
administration and enforcement of this Restatement and the other Loan Documents,
including reasonable legal fees and disbursements. The Borrower hereby agrees to
indemnify and hold harmless the Bank from and against any and all claims,
damages, losses, liabilities, costs or expenses (including, without limitation,
the reasonable fees and disbursements of counsel) which the Bank may reasonably
incur (or which may be claimed against the Bank by any person whatsoever) by
reason of, in connection with or in any way related to this Restatement and the
other Loan Documents or any of the transactions contemplated hereby or thereby;
provided that the Borrower shall not be required to indemnify the Bank for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent caused by gross negligence or willful misconduct of the Bank.
(i) BINDING NATURE. This Restatement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that the rights and obligations under this Restatement and
under any of the other Loan Documents may not be assigned by the Borrower
without the written consent of the Bank.
(j) UNDER SEAL. This Restatement shall be deemed to be an instrument
under seal and shall continue in full force and effect so long as any
indebtedness of the Borrower to the Bank remains unpaid.
36
If you agree with the terms of this Restatement, including the Exhibits attached
hereto and the other documents referred to herein, please sign below where
indicated in your capacity as President and Chief Executive Officer of the
Borrower.
CITIZENS BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Accepted and agreed to:
NATIONAL DENTEX CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
37
ID # 282842v01/3294-44
2/28/2002