EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of June 30, 2003 among ORTHODONTIC CENTERS OF AMERICA, INC., a Delaware
corporation (the "Borrower"), certain Domestic Subsidiaries of the Borrower (the
"Guarantors"), the Lenders party hereto (the "Lenders") and BANK OF AMERICA,
N.A., as Administrative Agent, L/C Issuer and Alternative Rate Lender (the
"Administrative Agent"). Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Credit Agreement (as defined below).
RECITALS
WHEREAS, the Borrower, the Guarantors, the Lenders and the
Administrative Agent are party to that certain Credit Agreement dated as of
January 2, 2003 (as previously amended and modified from time to time, the
"Credit Agreement"); and
WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the
Lenders have agreed to amend certain terms of the Credit Agreement on the terms,
and subject to the conditions, set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Amendments to Credit Agreement.
(a) Section 1.1. Subsection (b) of the definition of "Consolidated
Fixed Charges" in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(b) the aggregate amount of federal, state, local and other
income taxes paid in cash by the Credit Parties and their Subsidiaries
during such period, plus
(b) Section 6.24. A new Section 6.24 is hereby added to the Credit
Agreement to read as follows:
SECTION 6.24 TAX SHELTER REGULATIONS.
The Borrower does not intend to treat the Loans and/or Letters
of Credit and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the
event the Borrower determines to take any action inconsistent with such
intention, it will promptly notify the Administrative Agent thereof. If
the Borrower so notifies the Administrative Agent, the Borrower
acknowledges that one or more of the Lenders may treat its Loans and/or
its interest Letters of Credit as part of a transaction that is subject
to Treasury Regulation Section 301.6112-1, and such Lender or Lenders,
as applicable, will maintain the lists and other records required by
such Treasury Regulation.
(c) Section 7.1. Subsection (a) of Section 7.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
(a) Quarterly Statements. On or prior to the date that is
three (3) days after the date the Borrower is required by Law to file a
quarterly report on Form 10-Q with the Securities and Exchange
Commission and in any event within forty-eight (48) days after the end
of each of the first three fiscal quarters of each fiscal year (or, if
the 48th day after the fiscal quarter end is not a Business Day, then
the next Business Day after such 48th day), unaudited consolidated
balance sheets of the Credit Parties and their Subsidiaries as of the
end of such fiscal quarter and unaudited consolidated statements of
income, cash flows and stockholders' equity for the Credit Parties and
their Subsidiaries for the fiscal quarter then ended and for that
portion of the fiscal year then ended, in each case setting forth
comparative consolidated figures as of the end of and for the
corresponding period in the preceding fiscal year, all in reasonable
detail and prepared in accordance with GAAP (subject to the absence of
footnotes required by GAAP and subject to normal year-end adjustments)
applied on a basis consistent with that of the preceding quarter or
containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting
principles and practices during such quarter; and
(d) Section 7.2. A new Subsection (i) is hereby added to Section 7.2 of
the Credit Agreement to read as follows:
(i) Tax Shelter IRS Form. Promptly after the Borrower has
notified the Administrative Agent of any intention by the Borrower to
treat the Loans and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section
1.6011-4), a duly completed copy of IRS Form 8886 or any successor
form.
(e) Section 8.2. Subsection (j) of Section 8.2 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
(j) Indebtedness consisting of promissory notes made by a
Credit Party to Affiliated Practices under incentive programs (the
"Incentive Program Indebtedness") in an aggregate amount not to exceed
at any time outstanding (i) on or prior to December 31, 2003,
$25,000,000 and (ii) on and after January 1, 2004, $15,000,000;
(f) Section 11.14. The following sentence is hereby added to the end of
Section 11.14 of the Credit Agreement to read as follows:
Notwithstanding anything herein to the contrary, "Information" shall
not include, and the Administrative Agent and each Lender may disclose to any
and all Persons, without limitation of any kind, any information with respect to
the "tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Administrative Agent or such Lender relating to such tax
treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Loans, Letters of Credit and
transactions contemplated hereby.
2. Confirmation. The Administrative Agent and the Lenders hereby agree
that no Default or Event of Default has occurred under Section 7.1(a) of the
Credit Agreement in connection with the delivery of consolidating balance sheets
for the Credit Parties and their Subsidiaries for the fiscal quarter ending
March 31, 2003.
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3. Effectiveness; Conditions Precedent.
This Amendment shall be and become effective on the date when all of
the conditions set forth in this Section 2 shall have been satisfied.
(a) Execution and Delivery of Amendment. The Administrative Agent shall
have received copies of this Amendment, duly executed by the Borrower, the
Guarantors, the Required Lenders and the Administrative Agent.
(b) Amendment Fee. The Administrative Agent shall receive an amendment
fee, for the account of each Lender executing this Amendment on or prior to
12:00 Noon, Eastern Time, June 30, 2003, in an amount equal to 0.10% of the sum
of (i) such Lender's Pro Rata Share of the Revolving Committed Amount and (ii)
such Lender's Pro Rata Share of the then outstanding Term Loans.
(c) Fees and Expenses. Payment by the Borrower of all reasonable fees
and expenses owed by the Borrower to the Lenders and the Administrative Agent
including, without limitation, the fees and expenses set forth in that certain
Fee Letter dated as of June 23, 2003 and reasonable fees and expenses of Xxxxx &
Xxx Xxxxx PLLC, counsel to the Administrative Agent.
4. Ratification of Credit Agreement. The term "Credit Agreement" as
used in each of the Credit Documents shall hereafter mean the Credit Agreement
as amended and modified by this Amendment. Except as herein specifically agreed,
the Credit Agreement, as amended by this Amendment, is hereby ratified and
confirmed and shall remain in full force and effect according to its terms. The
Borrower acknowledges and consents to the modifications set forth herein and
agrees that this Amendment does not impair, reduce or limit any of its
obligations under the Credit Documents (including, without limitation, the
indemnity obligations set forth therein) and that, after the date hereof, this
Amendment shall constitute a Credit Document.
5. Authority/Enforceability. Each of the parties hereto represents and
warrants as follows:
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by
such Person and constitutes such Person's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(c) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by such Person of this Amendment.
(d) The execution and delivery of this Amendment does not (i)
violate, contravene or conflict with any provision of its, or its
Subsidiaries' organizational documents or (ii) materially violate,
contravene or conflict with any Requirement of Law or any other law,
regulation, order, writ, judgment, injunction, decree or permit
applicable to it or any of its Subsidiaries.
6. No Default. The Borrower represents and warrants to the Lenders that
after giving effect to this Amendment (a) the representations and warranties of
the Borrower set forth in Section VI of the
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Credit Agreement are true and correct as of the date hereof and (b) no event has
occurred and is continuing which constitutes a Default or an Event of Default.
7. Release. In consideration of the Lenders entering into this
Amendment, the Borrower hereby releases the Administrative Agent, the Lenders,
and the Administrative Agent's and the Lenders' respective officers, employees,
representatives, agents, counsel and directors from any and all actions, causes
of action, claims, demands, damages and liabilities of whatever kind or nature,
in law or in equity, now known or unknown, suspected or unsuspected to the
extent that any of the foregoing arises from any action or failure to act solely
in connection with the Credit Documents on or prior to the date hereof.
8. Counterparts/Telecopy. This Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts of this Amendment by telecopy shall be
effective as an original and shall constitute a representation that an original
shall be delivered promptly upon request.
9. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE
OF LAW AND CONFLICTS OF LAW RULES).
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered and this Amendment shall be
effective as of the date first above written.
BORROWER:
ORTHODONTIC CENTERS OF AMERICA, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
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GUARANTORS:
ORTHODONTIC CENTERS OF ALABAMA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF ARIZONA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF ARKANSAS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF CALIFORNIA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF CALIFORNIA-VISTA,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF COLORADO, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF CONNECTICUT,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF FLORIDA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF GEORGIA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF HAWAII, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF IDAHO, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF ILLINOIS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF INDIANA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF IOWA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF KANSAS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF KENTUCKY, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF LOUISIANA, INC.,
a Delaware corporation
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ORTHODONTIC CENTERS OF MAINE, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MARYLAND, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MASSACHUSETTS,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF MICHIGAN, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MINNESOTA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MISSISSIPPI, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MISSOURI, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NEBRASKA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NEVADA, INC.,
a Nevada corporation
ORTHODONTIC CENTERS OF NEW HAMPSHIRE,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF NEW JERSEY, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NEW MEXICO,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF NEW YORK, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NORTH
CAROLINA, INC., a Delaware corporation
ORTHODONTIC CENTERS OF NORTH DAKOTA,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF OHIO, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF OKLAHOMA, INC.,
a Delaware corporation
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ORTHODONTIC CENTERS OF OREGON, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF PENNSYLVANIA,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF PUERTO RICO,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF RHODE ISLAND,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF SOUTH
CAROLINA, INC., a Delaware corporation
ORTHODONTIC CENTERS OF TENNESSEE, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF TEXAS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF UTAH, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF VIRGINIA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF WASHINGTON,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF WASHINGTON
D.C., INC., a Delaware corporation
ORTHODONTIC CENTERS OF WEST VIRGINIA,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF WISCONSIN, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF WYOMING, INC.,
a Delaware corporation
OCA MERGERCO, INC.,
a Delaware corporation
ORTHALLIANCE, INC.,
a Delaware corporation
ORTHALLIANCE FINANCE, INC.,
a Delaware corporation
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ORTHALLIANCE PROPERTIES, INC.,
a California corporation
ORTHALLIANCE SERVICES, INC.,
a California corporation
ORTHALLIANCE HOLDINGS, INC.,
a Texas corporation
ORTHALLIANCE NEW IMAGE, INC.,
a Delaware corporation
PEDOALLIANCE, INC.,
a Delaware corporation
PEDOALLIANCE PROPERTIES, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
of each of the foregoing Guarantors
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ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
in its capacity as Administrative Agent
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
LENDERS:
BANK OF AMERICA, N.A.,
in its capacity as a Lender
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: Managing Director
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BANK ONE, NA,
in its capacity as a Lender
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
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U.S. BANK, NATIONAL ASSOCIATION,
in its capacity as a Lender
By: /s/ X. X. Xxxxxxx
--------------------------------------
Name: X. X. Xxxxxxx
Title: Senior Vice President
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LASALLE BANK NATIONAL ASSOCIATION,
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Officer
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HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxx
--------------------------------------
Name: Xxxxxxxxx X. Xxx
Title: Vice President
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WHITNEY NATIONAL BANK
By: /s/ Xxxxxxx Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx Xxxxxxx
Title: Senior Vice President
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