Exhibit 10.1
AMENDED AND RESTATED
LOAN AGREEMENT
BANK OF AMERICA, N.A.
$5,000,000 REVOLVING CREDIT FACILITY
$20,000,000 ACQUISITION REVOLVING CREDIT FACILITY
and
$20,000,000 TERM LOAN FACILITY
PROVIDED TO
NATIONAL DENTEX CORPORATION
and
GREEN DENTAL LABORATORIES, INC.
August 9, 2005
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........................................................................................4
(c) Additional Payments.............................................................................5
(d) Notice of Borrowing.............................................................................5
(e) Special Provisions Governing Loans..............................................................6
(f) Increased Capital Costs........................................................................12
(g) Taxes..........................................................................................12
3. Letters of Credit.......................................................................................13
(a) Issuance.......................................................................................13
(b) Notice of Proposed Issuance....................................................................13
(c) Conditions to Issuance.........................................................................14
(d) Expiry Dates...................................................................................14
(e) Drawings.......................................................................................14
(f) Reimbursement by the Borrowers.................................................................14
(g) Exculpatory Provisions.........................................................................15
(h) Indemnification by Borrowers...................................................................15
4. Definitions.............................................................................................16
5. Representations and Warranties..........................................................................23
(a) Organization...................................................................................23
(b) Authority......................................................................................23
(c) Approvals; Compliance with Statutes, Etc.......................................................24
(d) Valid Obligations..............................................................................24
(e) Assets.........................................................................................25
(f) Agreements.....................................................................................25
(g) Insurance......................................................................................25
(h) Litigation and Other Proceedings...............................................................25
(i) Labor Matters..................................................................................26
(j) ERISA..........................................................................................26
(k) Financial Statements...........................................................................26
(l) Projections....................................................................................27
(m) Taxes..........................................................................................27
(n) Investments....................................................................................27
(o) Investment Company.............................................................................27
(p) Equity Structure...............................................................................28
(q) Consolidated Total Funded Debt.................................................................28
(r) Patents, Copyrights and Trademarks.............................................................28
(s) Representations Accurate.......................................................................28
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6. Covenants...............................................................................................29
(a) Payments.......................................................................................29
(b) Intentionally omitted..........................................................................29
(c) Financial Report...............................................................................29
(d) Other Financial Reports Dentex will also furnish, or cause to be furnished, to the Bank:......30
(e) Maintain Rights Each Borrower shall:..........................................................30
(f) No Transfers...................................................................................31
(g) No Mergers.....................................................................................32
(h) Payment of Taxes...............................................................................32
(i) Guaranties.....................................................................................32
(j) Agreements.....................................................................................32
(k) Investments....................................................................................33
(l) Property.......................................................................................33
(m) Books and Records..............................................................................33
(n) Notices........................................................................................34
(o) Liens..........................................................................................35
(p) Modifications..................................................................................36
(q) Additional Indebtedness........................................................................36
(r) Payments to Affiliated Persons.................................................................36
(s) Minimum Consolidated Net Worth.................................................................37
(t) Fixed Charge Coverage Ratio....................................................................37
(u) Maximum Consolidated Total Funded Debt to Consolidated EBITDA..................................37
(v) Minimum Consolidated EBITDA....................................................................37
(w) Bank Accounts..................................................................................37
(x) Further Assurances.............................................................................38
7. Conditions of Closing...................................................................................38
(a) Amended and Restated Line of Credit Notes; Term Note...........................................38
(b) Warranties and Covenants.......................................................................38
(c) Closing Certificate............................................................................38
(d) Financial Statements...........................................................................39
(e) Annual Report..................................................................................39
(f) Valuation Report...............................................................................39
(g) No Adverse Change..............................................................................39
(h) Closing Fees and Legal Expenses................................................................39
(i) Legal Opinions.................................................................................40
(j) Projections....................................................................................40
(k) Approvals......................................................................................40
(l) Legality of Transactions.......................................................................40
(m) Proof of Corporate Action; Good Standing.......................................................40
(n) Payoff and Release Confirmation................................................................41
(o) Organizational and Capital Structure...........................................................41
(p) Lien Searches..................................................................................41
(q) Other Searches.................................................................................41
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8. Conditions of Making Subsequent Advances................................................................41
(a) Representations and Warranties.................................................................42
(b) Performance....................................................................................42
(c) Acquisitions...................................................................................42
9. Events of Default.......................................................................................43
(a) Representations and Warranties.................................................................43
(b) Covenants......................................................................................44
(c) Acceleration...................................................................................44
(d) Loan Documents.................................................................................44
(e) Voluntary Bankruptcy...........................................................................44
(f) Involuntary Bankruptcy.........................................................................45
(g) Seizure of Assets..............................................................................45
(h) Judgments......................................................................................45
(i) Liens..........................................................................................45
(j) Casualty Loss..................................................................................45
(k) Qualified Audit Report.........................................................................46
(l) Change of Control..............................................................................46
(m) ERISA..........................................................................................46
10. Remedies................................................................................................47
11. Joint and Several Liability.............................................................................48
12. Miscellaneous...........................................................................................49
(a) Waivers........................................................................................49
(b) Delays.........................................................................................49
(c) Notices........................................................................................50
(d) Set-Off........................................................................................50
(e) Jurisdiction; Waiver of Jury Trial.............................................................50
(f) Usury..........................................................................................51
(g) Execution......................................................................................52
(h) Governing Law..................................................................................52
(i) Fees; Indemnification..........................................................................52
(j) Binding Nature.................................................................................52
(k) Assignment; Participations; Pledge to Federal Reserve..........................................52
(l) Under Seal.....................................................................................53
(m) Use of Proceeds................................................................................54
(n) Confidentiality................................................................................54
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EXHIBITS
----------------- ---------------------------------------------
EXHIBIT FORM
----------------- ---------------------------------------------
A Form of Amended and Restated First Line of
Credit Note
----------------- ---------------------------------------------
B Form of Amended and Restated Second Line of
Credit Note
----------------- ---------------------------------------------
C Form of Term Note
----------------- ---------------------------------------------
D Form of Compliance Certificate
----------------- ---------------------------------------------
E Form of Joinder Agreement
----------------- ---------------------------------------------
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SCHEDULES
Schedule 5(a) Jurisdictions of Business Qualification of the Borrowers
Schedule 5(b) Authority
Schedule 5(c) Approvals
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(m) Taxes
Schedule 5(n) Investments
Schedule 5(p) Equity Structure of Borrowers
Schedule 5(q) Funded Debt
Schedule 5(r) Patents and Trademarks
Schedule 6(v) Bank Accounts
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BANK OF AMERICA, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
August 9, 2005
Xxxxx X. Xxxxx, President and
Chief Executive Officer
National Dentex Corporation
000 Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Re: LOAN AGREEMENT
Dear Xx. Xxxxx:
This Amended and Restated Loan Agreement (the "AGREEMENT") is made as
of August 9, 2005, by and among (a)(i) National Dentex Corporation, a
Massachusetts corporation ("DENTEX") and (ii) Green Dental Laboratories, Inc.,
an Arkansas corporation ("GREEN" and, collectively with Dentex, the
"BORROWERS"), and (b) Bank of America, N.A., organized and existing under the
laws of the United States (the "Bank").
WHEREAS, Dentex and the Bank are party to that certain Loan Agreement
dated as of June 30, 2004 (the "EXISTING LOAN Agreement") consisting of a
$5,000,000 revolving credit facility and a $20,000,000 acquisition revolving
credit facility;
WHEREAS, Dentex requested the Bank's consent to draw $20,000,000 under
the acquisition revolving credit facility to finance in part Dentex's purchase
of all of the issued and outstanding capital stock of Green;
WHEREAS, the Bank consented to Dentex's use of the acquisition
revolving credit facility to finance in part the purchase of all of the issued
and outstanding capital stock of Green; and
WHEREAS, the Bank, Dentex and Greeen have agreed to amend and restate
the Existing Loan Agreement to, among other things: (a) add a new term loan
facility in the aggregate principal amount of $20,000,000; (b) use the proceeds
of such term loan to repay the acquisition revolving credit facility; and (c)
include Green as a borrower thereunder.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged (these recitals being an integral
part of this Loan Agreement) the parties hereto hereby agree that the Existing
Loan Agreement is amended and restated in its entirety as follows:
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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 $5,000,000, available until the day prior to, and due and
payable on, the Lines of Credit 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 Agreement, of letters of credit for the Borrowers'
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 Borrowers for their general corporate purposes, to refinance
existing indebtedness and for the issuance of Letters of Credit.
(ii) a revolving line of credit (the "SECOND LINE OF CREDIT")
in an amount equal to $20,000,000, available until the day prior to, and due and
payable on, the Lines of Credit Termination Date (The First Line of Credit and
the Second Line of Credit may collectively hereinafter be referred to as the
"LINES OF CREDIT"). Advances under the Second Line of Credit may be used by the
Borrowers solely to fund acquisitions by the Borrowers in accordance with
Section 8 and the other terms and conditions hereof.
(iii) a term loan in the principal amount of $20,000,000 (the
"TERM LOAN") to be funded by the Bank on the Closing Date. The Borrowers,
jointly and severally, promise to pay to the Bank the principal amount of the
Term Loan in consecutive installments on the last day of each calendar month, in
an amount calculated on the basis of a seven (7) year amortization schedule,
commencing on August 9, 2005, with a final payment on the Term Loan Termination
Date in an amount equal to the unpaid balance of the Term Loan. The proceeds of
the Term Loan shall be applied on the Closing Date solely to the repayment of
the Second Line of Credit. No amount repaid with respect to the Term Loan may be
reborrowed.
(b) ADVANCES
After the Closing, advances under the Lines of Credit may be made, from time to
time, until the day prior to the Lines of Credit Termination Date, in such
amounts as the Borrowers 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 (after giving effect to all amounts
requested) PLUS the aggregate LC Exposure at such time, shall not exceed
$5,000,000; and in the case of the Second Line of Credit, the aggregate
principal amount of all advances at any time outstanding under the Second Line
of Credit (after giving effect to all amounts requested) shall not exceed
$20,000,000, provided that any such advances under the Second Line of Credit are
subject to the provisions set forth in Section 8(c) and 6(k) hereof; and
PROVIDED, FURTHER, that at the time the Borrowers request an advance under the
Lines of Credit and after giving effect to the making thereof, no Default or
Event of Default has occurred and is continuing. Subject to the terms of this
Agreement, advances under the First Line of Credit, once repaid, may be
reborrowed; advances under the Second Line of Credit, once repaid, may be
reborrowed, subject to the provisions set forth in Section 8(c) and 6(k) hereof.
If at any time the outstanding principal amount of the advances under a Line of
Credit exceeds the amount determined by reference to the limits set forth in the
first sentence of this Section 1(b), the Borrowers 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, and the Term Loan or any portion thereof as applicable shall bear
interest (i) at an annual rate equal to the Prime Rate (as hereinafter defined)
plus the Applicable Margin with respect thereto as in effect from time to time
(in which case such advance or Term Loan or portion thereof, as applicable,
shall be designated as a "PRIME RATE LOAN"), (ii) at the option of the
Borrowers, at the LIBOR Lending Rate for the applicable Interest Period plus the
Applicable Margin with respect thereto as in effect from time to time (in which
case such advance or Term Loan or portion thereof, as applicable, shall be
designated as a "LIBOR RATE LOAN"), (iii) at the option of the Borrowers, at the
Cost of Funds Rate for the applicable Interest Period plus the Applicable Margin
with respect thereto as in effect from time to time (in which case such advance
or Term Loan or portion thereof, as applicable, shall be designated as a "COST
OF FUNDS RATE LOAN"); or (iv) at the option of the Borrowers, at a fixed rate
equal to the rate announced by the Bank on the date of the Notice of Borrowing
or on the date of any conversion of a Loan to such fixed rate (in which case
such advance or Term Loan or portion thereof, as applicable, shall be designated
as a "FIXED RATE LOAN"). If any such interest rate is unlawful, then the rate
shall be the highest rate permitted under applicable law. Interest shall be
payable (i) in the case of Prime Rate Loans and Fixed Rate Loans, in arrears on
the first (1st) Business Day of each month, (ii) in the case of LIBOR Rate Loans
and Cost of Funds 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. 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. After the
occurrence and during the continuance of a Default or Event of Default and until
such Default or Event of Default has been cured, remedied or waived by the Bank,
the principal amount of the Lines of Credit and the Term Loan shall bear
interest at the annual rate of two percent (2%) above the Prime Rate, or, if
such rate is unlawful, the highest rate permitted under applicable law (the
"POST-DEFAULT RATE"). Any amounts overdue under this Agreement shall bear
interest at the Post-Default Rate. Interest at the Post-Default Rate shall be
payable on demand. (b) PAYMENTS. All payments received by the Bank from any of
the Borrowers, except for the payments referred to in Subsection (c) below and
regularly scheduled payments of the Term Loan under Section 1(a)(iii) hereof,
shall be applied first to expenses due hereunder, then to accrued interest and
then to principal. Upon the occurrence and during the continuance 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 Agreement, the records of the Bank and, (i)(A) with respect to
the First Line of Credit, a promissory note in the form of Exhibit A hereto (the
"AMENDED AND RESTATED FIRST LINE OF CREDIT NOTE"), and (B) with respect to the
Second Line of Credit, a promissory note in the form of Exhibit B hereto (the
"AMENDED AND RESTATED SECOND LINE OF CREDIT NOTE"), each due on the Lines of
Credit Termination Date (references in this Agreement to the term "Amended and
Restated Line of Credit Note" shall, except where the context does not otherwise
permit, be deemed to apply to both the Amended and Restated First Line of Credit
Note and the Amended and Restated Second Line of Credit Note); and (ii) with
respect to the Term Loan, a promissory note in the form of Exhibit C hereto (the
"TERM NOTE"), dated as of the Closing Date and due on the fifth (5th)
anniversary of the Closing Date. The LC Reimbursement Obligations shall be
evidenced by this Agreement, the records of the Bank and the Letters of Credit.
The records of the Bank shall be prima facie evidence of the advances hereunder,
the aggregate unpaid amount of the Term Loan and the LC Reimbursement
Obligations and, in each case, of accrued interest thereon and of all payments
made in respect thereof.
-3-
All payments due to the Bank hereunder, under the Amended and Restated
Line of Credit Notes or the Term Note shall be made in U.S. Dollars in
immediately available funds at Bank of America, N.A., 000 Xxxxxxx Xxxxxx,
Xxxxxx, XX 00000 or at such other address as the Bank may designate by notice to
the Borrowers. 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.
If any payment under this Agreement becomes due and payable on a day
that is not a Business Day and this Agreement does not otherwise provide for
such contingency, the maturity thereof shall be extended to the next succeeding
Business Day, and with respect to any payment of principal, interest thereon
shall be payable at the then applicable rate during any such extension.
(c) ADDITIONAL PAYMENTS. In addition to the amounts specified above,
the Borrowers shall pay to the Bank the following in connection with the Credit
Facility:(i) an unused facility fee equal to 1/8 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 quarterly in
arrears on the last Payment Dates specified herein, commencing on the first such
date following the Closing Date and on each Payment Date thereafter through the
Lines of Credit Termination Date (with the last such fee payable on the Lines of
Credit Termination Date);
-4-
(ii) a facility fee of $10,000.00 per annum for the Second Line of Credit,
payable annually in advance on the last day of June in each year, commencing on
June 30, 2004;
(iii) 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
(iv) 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) VOLUNTARY PREPAYMENTS OF COST OF FUNDS RATE LOANS, FIXED RATE LOANS
AND PRIME RATE LOANS.
The Borrowers may, upon notice to the Bank, at any
time or from time to time voluntarily prepay any Loan in
whole or in part without premium or penalty; PROVIDED that (i) such notice must
be received by the Bank not later than 1:00 p.m. (A) three (3) Business Days
prior to any date of prepayment of a Cost of Funds Rate Loan or a Fixed Rate
Loan and (B) on the date of prepayment of a Prime Rate Loan; (ii) any prepayment
of a Cost of Funds Rate Loan shall be in an integral multiple of (x) $500,000 in
the case of Cost of Funds Rate Loans advanced under the First Line of Credit,
(y) $1,000,000 in the case of Cost of Funds Rate Loans advanced under the Second
Line of Credit, and (z) $1,000,000 in the case of Cost of Funds Rate Loans of
any portion of the Term Loan; and (iii) any prepayment of a Prime Rate Loan or a
Fixed Rate Loan shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof, or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the type(s) of Loan(s) to be prepaid. If such
notice is given by the Borrowers, the Borrowers shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Loan shall be accompanied by all accrued
interest thereon. Any prepayment of a Fixed Rate Loan shall be accompanied by
such accrued interest, together with any Redeployment Costs required pursuant to
Section 2(g).
(e) NOTICE OF BORROWING. Whenever the Borrowers elect to obtain a LIBOR
Rate Loan or Cost of Funds Rate Loan or Fixed Rate Loan under either of the
Lines of Credit or in respect of the Term Loan or any portion thereof, they may
request that the Bank provide quotes as of any specified date as to the LIBOR
Lending Rate or Cost of Funds Rate Loan or Fixed Rate Loan for any or all
Interest Periods, and the Bank shall promptly provide such quotes. The Borrowers
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 or Fixed Rate Loan and (ii) not later than 10:00 a.m.
(Boston time) at least two (2) Business Days prior to the day of any advance
with respect to a LIBOR Rate Loan or Cost of Funds 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, Cost of Funds
Rate Loan, LIBOR Rate Loan, or Fixed Rate Loan, and in the case of a LIBOR Rate
Loan, Cost of Funds Rate Loan or Fixed 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 Borrowers at any time fail in such notice to
specify any of the information required by this subsection to be given with
respect to a LIBOR Rate Loan, Cost of Funds Rate Loan, or Fixed Rate Loan, then
the Borrowers 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 Borrowers' operating account with
the Bank.
-5-
(f) SPECIAL PROVISIONS GOVERNING LOANS
Notwithstanding any other provisions of this Agreement to the contrary,
the following provisions shall govern with respect to any LIBOR Rate Loans or
Cost of Funds Rate Loans (as applicable):
(i) REPAYMENT, CONTINUATION AND CONVERSION. Each LIBOR Rate
Loan or Cost of Funds Rate Loan shall mature and, with respect to such Loans
under the Lines of Credit, become payable in full on the last day of the
Interest Period relating thereto. Upon maturity, a LIBOR Rate Loan or Cost of
Funds 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 Borrowers 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, Cost of
Funds Rate Loans or Fixed 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, Cost of Funds Rate
Loans or Fixed Rate Loans, (C) to convert at any time one or more integral
multiples of $1,000,000 of its outstanding Prime Rate Loans under the Term Loan
into one or more LIBOR Rate Loans, Cost of Funds Rate Loans, or Fixed Rate
Loans, (D) effective on and as of the expiration date of the Interest Period of
a LIBOR Rate Loan or Cost of Funds Rate Loan, to continue such loan LIBOR Rate
Loan or Cost of Funds Rate Loan, respectively, as such, with an equivalent or
different Interest Period, or (E) effective on and as of the expiration date of
the Interest Period of a LIBOR Rate Loan or Cost of Funds Rate Loan, to convert
such loan to a Prime Rate Loan; PROVIDED, HOWEVER, that (x) a LIBOR Rate Loan or
Cost of Funds Rate Loans may only be continued pursuant to clause (D) above if
the outstanding principal amount of such loan equals or exceeds $500,000 in the
case a LIBOR Rate Loan or Cost of Funds Rate Loan advanced under the First Line
of Credit, $1,000,000 in the case of a LIBOR Rate Loan or Cost of Funds Rate
Loans advanced under the Second Line of Credit, or $1,000,000 in the case of
LIBOR Rate Loan or Cost of Funds Rate Loans under the Term Loan; (y) no portion
of the outstanding principal amount of any advance may be converted to, or
continued as, a LIBOR Rate Loan or Cost of Funds 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 or Cost of Funds Rate Loan
may be converted to a LIBOR Rate Loan or Cost of Funds Rate Loan, respectively,
of a different duration if such LIBOR Rate Loan or Cost of Funds 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.
-6-
The Borrowers 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) Business Days in advance of the proposed
conversion/continuation date for a LIBOR Rate Loan or a Cost of Funds Rate Loan.
A notice of conversion/continuation shall, in the case of a conversion to, or
continuation of, a LIBOR Rate Loan or a Cost of Funds Rate Loan, be irrevocable
and shall be given by the Borrowers 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 Line of Credit Loan, Second Line of
Credit Loan or the Term Loan or a portion thereof, (iii) the amount of the First
or Second Line of Credit Loan or the Term Loan, or a portion thereof, to be
converted/continued, (iv) (A) whether the First or Second Line of Credit Loan or
portion of the Term Loan to be converted/continued is a Prime Rate Loan, Cost of
Funds Rate Loan, LIBOR Rate Loan, or Fixed Rate Loan, and (B) whether the First
or Second Line of Credit Loan or portion of the Term Loan into which such First
or Second Line of Credit Loan is converted/continued is to be a Prime Rate Loan,
Cost of Funds Rate Loan LIBOR Rate Loan, or Fixed Rate Loan, and (v) in the case
of a conversion to, or a continuation of, a LIBOR Rate Loan or Cost of Funds
Rate Loan, the requested Interest Period.
In lieu of delivering the above-described
notice, the Borrowers 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 Borrowers fail to give such notice
with respect to a LIBOR Rate Loan or Cost of Funds Rate Loan at least two (2)
Business Days before the last day of the then current Interest Period with
respect thereto, the Borrowers shall be deemed to have delivered to the Bank a
notice to convert such Loan into a Prime Rate Loan and such 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 Borrowers shall
be bound to convert or continue in accordance therewith.
(iii) DETERMINATION AND NOTICE OF LIBOR LENDING RATE,
COST OF FUNDS RATE OR FIXED RATE. Promptly after receipt of notice from the
Borrowers that they wish to elect a LIBOR Rate Loan, Cost of Funds Rate Loan, or
Fixed 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, Cost of Funds Rate, or Fixed Rate, as applicable,
which rate shall apply to the LIBOR Rate Loans, Cost of Funds Rate Loans, or
Fixed Rate Loans, as applicable, 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 Borrowers.
-7-
(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 Borrowers and until the Bank shall notify
the Borrowers that the circumstances causing such suspension no longer exist,
(1) the obligations of the Bank under this Agreement 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 Borrowers, be conclusive
and binding on the Borrowers, 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 Borrowers
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 Borrowers have 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 Borrowers shall
give the Bank, no later than 10:00 a.m. (Boston time), at least 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, (y) $1,000,000 in the
case of LIBOR Rate Loans advanced under the Second Line of Credit, and (z)
$1,000,000 in the case of LIBOR Rate Loans of any portion of the Term Loan, 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.
-8-
Borrowers acknowledge 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 Borrowers hereby jointly and severally promise 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.
-9-
(vii) INDEMNITIES. In addition to the LIBOR
Prepayment Fee, the Borrowers agree 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 Borrowers 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 Borrowers 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 Borrowers. The Borrowers understand, agree and acknowledge
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 Borrowers
have 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.
Borrowers further agree 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:
-10-
(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 Bank of the principal of
or interest on its LIBOR Rate Loans or any other amounts due under this
Agreement 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
Agreement with respect thereto, by an amount deemed by the Bank to be material,
then, within 15 days after demand by the Bank, the Borrowers 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 Borrowers. 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.
(g) VOLUNTARY PREPAYMENT OF FIXED RATE LOANS.
Borrowers acknowledge that prepayment of a Fixed Rate Loan prior to the
end of the applicable 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 Fixed Rate Loans
shall be accompanied by, and the Borrowers hereby jointly and severally promise
to pay, on each date a Fixed Rate Loan is prepaid, in addition to all other sums
then owing, the Bank's (i) cost of obtaining funds for the Fixed Rate Loan that
is the subject of such prepayment for the period from the date of such
prepayment to the last day of the Interest Period in effect (or that would have
been in effect) for such Fixed Rate Loan over (ii) the amount of interest likely
to be realized by the Bank in redeploying the funds released or not utilized by
reason of such prepayment for such period. A certificate of the Bank setting
forth any amount or amounts which the Bank is entitled to receive pursuant to
this Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error.
-11-
(h) 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 Borrowers, the Borrowers 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 Borrowers. In determining such amount, the Bank may use any
method of averaging and attribution that it (in its reasonable discretion) shall
deem applicable.(i) TAXES. All payments by the Borrowers of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without 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 Borrowers
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrowers 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 Borrowers 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 Borrowers fail to pay any Taxes when due to the appropriate
taxing authority or fail to remit to the Bank the required receipts or other
required documentary evidence, the Borrowers 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.
-12-
3. LETTERS OF CREDIT.
(a) ISSUANCE. The Bank agrees, on the terms and conditions set forth in
this Agreement, to issue standby letters of credit hereunder (each a "LETTER OF
CREDIT") at the request of the Borrowers from time to time prior to the date
that is 30 days before the Lines of Credit 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
$5,000,000. All Letters of Credit issued and outstanding under the Existing Loan
Agreement, on and as of the Closing Date shall become Letters of Credit
hereunder.(b) NOTICE OF PROPOSED ISSUANCE. With respect to each Letter of
Credit, the Borrowers 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:(i) such Letter of Credit shall be
reasonably satisfactory in form and substance to the Bank,
(ii) the Borrowers 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 hereof
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 (5th) Business Day before the Lines of Credit 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
Borrowers' 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) reasonably promptly notify the Borrowers 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 BORROWERS. If any amount is drawn under any
Letter of Credit, the Borrowers irrevocably and unconditionally agree 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 Borrowers 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").
-13-
In addition, the Borrowers agree 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 Applicable
Margin with respect to the LIBOR Rate Loans as in effect on such day. The
Borrowers also agree 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 Borrowers 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
Borrowers may have or have had against the Bank, any beneficiary of any Letter
of Credit or any other person. The Borrowers assume all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect 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 Borrowers 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 Borrowers, any beneficiary of any Letter of Credit or any
other person or any claims or defenses whatsoever of the Borrowers 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 Borrowers and
shall not place the Bank under any liability to the Borrowers.
(h) INDEMNIFICATION BY BORROWERS. Each of the Borrowers 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 Borrowers 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 Borrowers under any other
provision of this Section 3.
-14-
4. DEFINITIONS. All defined terms used in this Agreement which are not
otherwise defined herein shall have the respective meanings assigned to them in
the Loan Documents. For purposes of this Agreement and of the Loan Documents,
the following additional definitions shall apply:
(a) The term "AFFILIATED PERSON" shall mean any person or entity
controlling, controlled by or under common control with any of the Borrowers.
(b) The term "ANTI-TERRORISM ORDER" shall mean Executive Order No.
13,224 66 Fed Reg. 49,079 (2001) issued by the President of the United States of
America (Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism).
(c) The term "APPLICABLE MARGIN" shall mean, for any Type of Loans, the
percentage determined in accordance with the following table:
---------------------------- -------------------------- -------------------------- --------------------------
RATIO OF CONSOLIDATED PRIME RATE LOANS LIBOR RATE LOANS COST OF FUNDS RATE LOANS
TOTAL FUNDED DEBT TO
CONSOLIDATED EBITDA
---------------------------- -------------------------- -------------------------- --------------------------
Greater than 1.5:1.0 but 0% 2.25% 2.25%
less than or equal to
2.0:1.0
---------------------------- -------------------------- -------------------------- --------------------------
Greater than 1.0:1.0 but 0% 1.75% 1.75%
less than or equal to
1.5:1.0
---------------------------- -------------------------- -------------------------- --------------------------
Less than or equal to 0% 1.25% 1.25%
1.0:1.0
---------------------------- -------------------------- -------------------------- --------------------------
For purposes of determining the Applicable Margin, the Ratio of Consolidated
Total Funded Debt to Consolidated EBITDA (calculated for the period of four (4)
consecutive fiscal quarters ending on the date of calculation) will be tested
quarterly, commencing with the fiscal quarter of the Borrowers ending June 30,
2005, based on the Compliance Certificate required to be delivered pursuant to
Section 6(d) hereof with respect to such fiscal quarter. Notwithstanding the
foregoing, from the Closing Date through the date on which the Compliance
Certificate for the fiscal quarter ending June 30, 2005 is required to be
delivered pursuant to Section 6(d), the Applicable Margin shall be equal to 0%
for Prime Rate Loans and 2.25% for LIBOR Rate Loans and Cost of Funds Loans. For
purposes of determining the Applicable Margin, any interest rate change shall be
effective on the first (1st) Business Day of the fiscal month following delivery
of the Compliance Certificate required to be delivered pursuant to Section 6(d)
hereof is delivered to the Bank, together with a notice to the Bank (which shall
be verified by the Bank) specifying any change in the Applicable Margin, and if
the Borrowers have failed to deliver the Compliance Certificate required to be
delivered pursuant to Section 6(d) hereof, the Applicable Margin that would
otherwise be in effect shall automatically be increased to the highest margin
until such Compliance Certificate is delivered.
-15-
(d) 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.
(e) The term "CAPITAL EXPENDITURE" shall mean any payment made or
required to be made, directly or indirectly, by any of the Borrowers or any of
their 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 Borrowers or any of their 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
Borrowers thereunder would be required by GAAP to be capitalized and shown as
liabilities on the consolidated balance sheet of the Borrowers and their
subsidiaries.
(f) The term "CLOSING" shall mean a closing at which the Credit
Facility is to be entered into as reflected herein.
(g) The term "CLOSING DATE" shall mean August 9, 2005.
(h) The term "CONSOLIDATED" or "CONSOLIDATED" shall mean, with
reference to any term defined herein, that term as applied to the accounts of
the Borrowers and their subsidiaries consolidated in accordance with GAAP.
-16-
(i) 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) cash dividends or distributions in respect of the
Borrowers' capital stock, (iii) payments by the Borrowers in respect of any
repurchase, redemption, conversion or other retirement of any of the Borrowers'
capital stock, and (iv) payments due by the Borrowers in respect of the deferred
purchase price of assets pursuant to acquisitions permitted by Sections 8(c) and
6(k) hereunder, all as determined in accordance with GAAP to the extent
applicable. For the avoidance of confusion, whenever Consolidated Adjusted
EBITDA is calculated, it shall be calculated for the period of four (4)
consecutive fiscal quarters ending on the date of such calculation.
(j) 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 Borrowers and their 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. For the avoidance of confusion,
whenever Consolidated EBITDA is calculated, it shall be calculated for the
period of four (4) consecutive fiscal quarters ending on the date of such
calculation.
(k) 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 Borrowers and their 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.
(l) The term "CONSOLIDATED NET WORTH" on any date shall mean, for the
Borrowers and their subsidiaries on a consolidated basis, Shareholders' Equity
on such date.
(m) The term "CONSOLIDATED TOTAL FUNDED DEBT" shall mean, as of any
date of determination, for the Borrowers and their subsidiaries on a
consolidated basis, (i) all outstanding Indebtedness, current or funded, secured
or unsecured, incurred in connection with borrowings or the making available of
credit or funds, (ii) all Indebtedness issued, incurred or assumed in respect of
the purchase price of property, except for trade accounts payable incurred in
the ordinary course of the Borrowers' or their subsidiaries' business consistent
with the policies of the Borrowers or their subsidiaries 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, (iii) all
capitalized lease obligations (as defined by GAAP), and (iv) all direct
obligations arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar instruments.
-17-
(n) The term "COST OF FUNDS RATE" means the per annum rate of interest
which Bank is required to pay, or is offering to pay, for wholesale liabilities
of like tenor, adjusted for reserve requirements and such other requirements as
may be imposed by federal, state or local government and regulatory agencies, as
determined by Bank.
(o) 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 an Event of Default.
(p) The term "FIXED CHARGE COVERAGE RATIO" shall mean as of the end of
any fiscal quarter of the Borrowers the ratio of (x) Consolidated EBITDA for the
period of four consecutive fiscal quarters ending with such fiscal quarter,
determined in accordance with GAAP, to (y) the sum of (A) the aggregate amount
of principal payments of Indebtedness of the Borrowers or any of their
subsidiaries scheduled to have been made during such period PLUS (B) the
aggregate amount of interest expense of the Borrowers or any of their
subsidiaries for such period.
(q) The term "FIXED RATE" shall mean the rate of interest quoted by the
Bank from time to time in Boston as its "fixed rate", which is not necessarily
the Bank's lowest rate of interest.
(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
Borrowers to the Bank under interest rate swap agreements or any other
agreements or arrangements designed to protect the Borrowers 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 "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 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.
-18-
(v) The term "INTEREST PERIOD" shall mean, with respect to any (1)
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(e) or Section 2(f)(ii)
and ending on (but excluding) the day which numerically corresponds to such date
30, 60, 90, or 180 days thereafter, in each case as the Borrowers may select in
their notice pursuant to Section 2(d) or Section 2(f)(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 30, 60, 90, or 180 days thereafter, as selected by the Borrowers by
irrevocable notice to the Bank not less than two (2) Business Days prior to the
last day of the then current Interest Period with respect thereto;
PROVIDED, HOWEVER, that:
-------- -------
(A) the Borrowers 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
Agreement shall be of the same duration;
(C) Interest Periods for LIBOR Rate Loans in
connection with which the Borrowers have 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;
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(2) with respect to any Cost of Funds Rate Loan:
(i) initially, the period beginning on (and
including) the date on which such Cost of Funds Rate Loan is made or continued
as, or converted into, a Cost of Funds Rate Loan pursuant to Section 2(e) or
Section 2(f)(ii) and ending on (but excluding) the day that is seven (7), 14 or
30 days thereafter (or, if such day 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), in each case as the Borrowers may select in their
notice pursuant to Section 2(e) or Section 2(f)(ii); and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Cost of Funds Rate
Loan and ending seven (7), 14 or 30 days thereafter, as selected by the
Borrowers by irrevocable notice to the Bank not less than two (2) Business Days
prior to the last day of the then current Interest Period with respect thereto.
(3) with respect to any Fixed Rate Loan:
(i) the period beginning on (and including) the date
on which such Fixed Rate Loan is made, or converted into a Fixed Rate Loan,
pursuant to Section 2(e) and ending on the date specified in the Notice of
Borrowing.
(w) The term "INTEREST PAYMENT DATE" shall mean, with respect to (1)
any LIBOR Rate Loan having an Interest Period of 90 days or less, the last
Business Day of such Interest Period, and as to any LIBOR Rate Loan having an
Interest Period longer than 90 days, each Business Day which is 90 days, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period, and (2) any Cost of Funds Rate Loan or Fixed Rate
Loan, the last Business Day of the Interest Period applicable thereto.
(x) 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.
(y) The term "LC REIMBURSEMENT OBLIGATIONS" shall mean, at any time,
all obligations of the Borrowers to reimburse the Bank for amounts paid by the
Bank in respect of drawings under Letters of Credit.
(z) The term "LETTER OF CREDIT" shall have the meaning set forth in
Section 3(a) hereof.
(aa) 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.
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(bb) 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 Lending Rate = LIBOR RATE
------------------------------------
(1.00 - LIBOR Reserve Percentage)
(cc) 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.
(dd) The term "LINES OF CREDIT TERMINATION DATE" shall mean the
maturity date of the Lines of Credit, June 30, 2007.
(ee) The term "LOAN" shall mean an extension of credit by the Bank to
the Borrowers, in the form of an advance under either of the Lines of Credit, a
Letter of Credit issued under the First Line of Credit, or the Term Loan.
(ff) The term "LOAN DOCUMENTS" shall mean (i) this Agreement, including
the Exhibits and Schedules attached hereto, the Amended and Restated Line of
Credit Notes and the Term Note, (ii) any agreement or agreements between the
Borrowers 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.
(gg) The term "LONDON BANKING DAY" shall mean a day on which dealings
in U.S. Dollar deposits are transacted in the London interbank market.
(hh) The term "NOTES" shall refer to, together, the Amended and
Restated First Line of Credit Note, the Amended and Restated Second Line of
Credit Note, and the Term Note.
(ii) The term "PATRIOT ACT" shall mean Public Law 107-56 of the United
States of America, United and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of
2001.
(jj) The term "PAYMENT DATE" shall mean the last Business Day of each
April, July, October and January from and after the Closing Date.
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(kk) 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.
(ll) The term "SHAREHOLDERS' EQUITY" on any date shall mean
stockholders' equity determined in accordance with GAAP.
(mm) The term "TERM LOAN TERMINATION DATE" shall mean the maturity date
of the Term Loan, August 9, 2005.
(nn) The term "TERMINATION DATE" shall mean, as applicable, each of the
Lines of Credit Termination Date and the Term Loan Termination Date.
5. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and severally represent
and warrant as follows (with the following representations and warranties being
deemed to apply to each subsidiary of a Borrower on the same basis as which such
representations and warranties expressly apply to such Borrower):
(a) ORGANIZATION. Each of the Borrowers 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 Borrowers' business,
prospects or financial condition, taken as a whole (a list of the jurisdictions
where the Borrowers are 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 after the Closing; and each of the Borrowers has
all requisite corporate power and authority to execute and deliver, and to
perform all of its obligations under, this Agreement and the other Loan
Documents.
(b) AUTHORITY. The execution, delivery and performance by each of the
Borrowers of this Agreement 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 any 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 any of the Borrowers
is a party or by which 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 Borrowers' properties; and none of the
Borrowers is 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.
-22-
(c) APPROVALS; COMPLIANCE WITH STATUTES, ETC. (i) 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 each of the Borrowers of this Agreement
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. Each of the Borrowers 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 any of the Borrowers and their subsidiaries,
taken 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 none of the Borrowers has any
reason to believe that any such material license, permit, certificate or other
governmental authorization will be revoked, cancelled, rescinded, modified or
lost.
(ii) Each of the Borrowers and each of the Borrowers'
subsidiaries is in compliance with all applicable laws, statutes, rules,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except for such non-compliances as
could not reasonably be expected to have a material adverse effect on the
Borrowers and their business, taken as a whole. Without limitation of the
foregoing, each of the Borrowers and each of their subsidiaries is in compliance
with, and neither the entering into of the Loan Documents or the use of the
proceeds of the Loans will violate: any law, rule or regulation relating to
anti-terrorism or money laundering, including the Anti-Terrorism Order, the
Patriot Act, the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
(d) VALID OBLIGATIONS. This Agreement and the other Loan Documents to
which each of the Borrowers is a party have been duly executed and delivered by
each of the Borrowers and constitute legal, valid and binding obligations of
each of the Borrowers, enforceable in accordance with their respective terms.
-23-
(e) ASSETS. Except as noted on Schedule 5(e), each of the Borrowers 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.
(f) AGREEMENTS. None of the Borrowers is 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 Borrowers and their subsidiaries, taken as a whole,
or which could materially adversely affect the ability of any of the Borrowers
to perform its obligations under this Agreement 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 each of the Borrowers covering its
properties and assets as of the date hereof. Each of the Borrowers 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, each of the Borrowers 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 each of the Borrowers 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 any of the Borrowers 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 any of the Borrowers and their
subsidiaries, taken as a whole.
(i) LABOR MATTERS. Except as set forth on Schedule 5(i) hereto, none of
the Borrowers is a party to any collective bargaining or similar agreement and
each of the Borrowers 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 any such 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 any of the Borrowers other than in the
ordinary course of business.
-24-
(j) ERISA. No "prohibited transaction" or "accumulated funding
deficiency" or "reportable event" has occurred with respect to any "single
employer plan" of any of the Borrowers that could subject any of the Borrowers
to a tax, penalty or liability in an amount in excess of $500,000 per such
occurrence. None of the Borrowers, any predecessor to any of the Borrowers or
any "commonly controlled entity" has ever been included in a "multiemployer
plan" as to which any of the Borrowers or any "commonly controlled entity" would
have liability if any of the Borrowers 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. Dentex has delivered to the Bank (i)
consolidated financial statements of such Borrower and its consolidated
subsidiaries, including consolidated balance sheets, statements of income and
retained earnings and statements of changes in financial position (collectively,
the "2004 FINANCIAL STATEMENTS") for and as of the end of the fiscal year ended
December 31, 2004, and (ii) unaudited consolidated balance sheets and statements
of income of Dentex and its consolidated subsidiaries for and as of the end of
the fiscal quarter ended March 31, 2005 (collectively, together with the 2004
Financial Statements, the "FINANCIAL STATEMENTS"). The 2004 Financial Statements
have been audited by PriceWaterhouseCooper, certified public accountants. The
Financial Statements present fairly in all material respects the consolidated
financial condition and performance and results of operation of the Borrowers
and their 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, 2004, (i) the physical assets and
properties owned or leased by the Borrowers and their subsidiaries, taken as a
whole, have not suffered any material destruction or damage, regardless of
whether or not any such loss was insured, (ii) neither any of the Borrowers nor
any of their 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 Borrowers and their subsidiaries, taken as a whole.
(l) PROJECTIONS. Dentex has delivered to the Bank certain unaudited
projections of Dentex and its subsidiaries on a consolidated basis, including
projected balance sheets, projected results of operations, including projected
profit and loss statements, and projected cash flow statements, each as of the
end of each fiscal year through December 31, 2010. 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 Dentex 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
Dentex as to the future financial results and condition of Dentex and its
subsidiaries.
-25-
(m) TAXES. Except as set forth on Schedule 5(m), each of the Borrowers
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 any of the Borrowers 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 any of the Borrowers acquired by such Borrower pursuant to
acquisitions that either (i) are funded by one or more advances under the Second
Line of Credit pursuant to Section 8 hereof or (ii) are permitted under Section
6(k) hereof, none of the Borrowers own any securities or other equity or debt
interests in any corporation, partnership or other business entity. All of the
Affiliated Persons of each of the Borrowers are set forth on Schedule 5(n).
(o) INVESTMENT COMPANY. None of the Borrowers is 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 Dentex and its
subsidiaries, including each class of their capital stock and other securities,
is set forth on Schedule 5(p). Each of Dentex's subsidiaries is wholly-owned,
directly or indirectly through one or more subsidiaries, by Dentex.
(q) CONSOLIDATED TOTAL FUNDED DEBT. Attached as Schedule 5(q) hereto is
a list of the Consolidated Total Funded Debt, 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. Other than as set
forth on Schedule 5(q) hereto, none of such Consolidated Total Funded Debt is
secured by any lien, encumbrance, mortgage, pledge, or security interest given
by any of the Borrowers or any of their subsidiaries.
(r) PATENTS, COPYRIGHTS AND TRADEMARKS. Except as set forth on Schedule
5(r), none of the Borrowers own any trademarks, copyrights or patents which are
material in the ordinary course of business as each of the Borrowers' business
is currently conducted or as such business is contemplated to be conducted in
the future.
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(s) REPRESENTATIONS ACCURATE. No representation or warranty made by any
of the Borrowers 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 any of the Borrowers which materially
adversely affects, or which would in the future materially adversely affect, the
business, operations, property or financial condition of any of the Borrowers
and their subsidiaries, taken as a whole.
6. COVENANTS. Each of the Borrowers incorporates herein all of the
affirmative and negative covenants contained in the other Loan Documents. In
addition, each of the Borrowers 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
each of the Borrowers):
(a) PAYMENTS Each Borrower shall duly and punctually make, or cause to
be made, the payments required under this Agreement, the Amended and Restated
Line of Credit Notes and the Term Note and shall perform and observe all of its
other obligations under the Loan Documents.
(b) INTENTIONALLY OMITTED.
(c) FINANCIAL REPORT. Dentex shall furnish, or cause to be furnished,
to the Bank:
(i) as soon as available, but in any event within 120 days
after the end of each fiscal year of Dentex, a copy of the audited consolidated
balance sheet of Dentex 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
Dentex's management prepared in connection with Dentex's annual audit report;
(ii) as soon as available, but in any event within 60 days
after the end of each fiscal quarter end in each fiscal year of Dentex, copies
of the unaudited consolidated balance sheets of Dentex and its consolidated
subsidiaries as at the end of such quarterly period, together with the related
unaudited consolidated statements of income for such quarterly period and for
the portion of the fiscal year of Dentex through such quarterly period, in each
case certified by the Chief Financial Officer of Dentex as presenting fairly in
all material respects the financial condition and results of operations of
Dentex 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
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(iii) as soon as available, but in any event not less than 14
days prior to the end of each fiscal year of Dentex, a projected balance sheet,
projected cash flow statement (including proposed Capital Expenditures) and
projected profit and loss statement of Dentex 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; PROVIDED THAT, in the event Dentex shall begin, after the Closing
Date, to prepare such projections for a period greater than the forthcoming
fiscal year, Dentex shall furnish the same to Bank pursuant to the terms of this
Section 6(c)(iii).
(d) OTHER FINANCIAL REPORTS Dentex will also furnish, or cause to be
furnished, 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 Dentex in the form
of EXHIBIT D attached hereto (a "COMPLIANCE CERTIFICATE") (i) stating that, to
the best of such person's knowledge, during the period covered by such set of
financial statements, the Borrowers have observed or performed in all respects
all of its covenants and other agreements and satisfied in all material respects
every condition contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that, to the best of such person's
knowledge, no Default or Event of Default exists (except as specified in such
certificate), (ii) showing in detail the calculations supporting such statement
in respect of the covenants set forth in Sections 6(s) through 6(u) and (iii)
stating that such financial statements present fairly in all material respects
the financial condition and results of operations of Dentex and its consolidated
subsidiaries, in conformity with GAAP (subject, with respect to quarterly
financial statements, to normal year-end audit adjustments and to the fact that
such financial statements may be condensed and may not include footnotes);
(ii) promptly after the same are sent and received, copies of
all financial statements, reports and notices which Dentex sends to holders of
all classes of capital stock of Dentex or which Dentex receives from such
holders;
(iii) promptly, such additional financial and other
information as the Bank may from time to time reasonably request; and
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(iv) as soon as available, a copy of each other report
submitted to such Borrower by its certified public accountants in connection
with any annual, interim or special audit made by them of the books of such
Borrower.
(e) MAINTAIN RIGHTS Each 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, all applicable material laws and regulations wherever
its business is conducted, and all applicable decrees, orders and judgments;
(iii) perform or comply with the terms and conditions of each
material contract, agreement or obligation to which it is a party, and the
provisions of its charter documents;
(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;
(vi) not establish any subsidiaries, other than pursuant to
acquisitions that either (A) are funded by one or more advances under the Second
Line of Credit pursuant to Section 8 hereof, or (B) are permitted under Section
6(k) hereunder. All subsidiaries established or acquired by such Borrower or any
of its subsidiaries shall be wholly-owned, either directly or indirectly through
one or more other subsidiaries, by such Borrower. If such subsidiaries are not
consolidated or merged with such Borrower within 45 days of their acquisition or
establishment, then any such subsidiaries shall become a borrower or guarantor
hereunder, at the Bank's sole discretion. Upon forming or acquiring any
subsidiary, at the Bank's discretion such subsidiary and such Borrower shall
execute and deliver to the Bank (a) a joinder agreement substantially in the
form of EXHIBIT E attached hereto and the documents referred to therein and (b)
such other documents reasonably requested by the Bank consistent with the terms
of this Agreement which provide that such subsidiary shall become bound by all
of the terms, covenants and agreements contained in the Loan Documents. Upon
satisfaction of the conditions set forth in this Section 6(e), each newly-formed
or acquired subsidiary shall become a Borrower or guarantor hereunder and under
the other Loan Documents to the same extent as if such subsidiary had been a
party hereto and thereto on the Closing Date; and
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(vii) (A) with respect to Dentex, maintain its chief executive
office at 000 Xxxxxx Xxxx Xxxx, Xxxxxxx, XX 00000, (B) with respect to Green,
maintain its chief executive office at 0000 Xxxxxxx Xxxx, Xxxxx Xxxxxxx,
Xxxxxxxx 00000 or at such other place in the United States of America as such
Borrower shall designate upon written notice to the Bank, where notices,
presentations and demands to or upon such Borrower in respect of the Loan
Documents may be given or made.
(f) NO TRANSFERS. 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 $50,000 in
any fiscal year.
(g) NO MERGERS. 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 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 Second 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 any of the Borrowers with and into
any of the Borrowers or any other subsidiary of any of the Borrowers, provided
that if any Borrower is a constituent party to any such merger it shall be the
surviving corporation of such merger.
(h) PAYMENT OF TAXES. 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 such
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 such 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 such Borrower.
(i) GUARANTIES. None of the Borrowers shall 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 the Second Line of
Credit pursuant to Section 8 hereof or (ii) is permitted under Section 6(k)
hereunder, and endorsements by such Borrower in the ordinary course of business
of negotiable instruments for deposit or collection.
(j) AGREEMENTS. None of the Borrowers shall 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 such
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) hereof, (ii) shall be on an arms-length basis, and (iii)
shall be on terms and conditions no more favorable than such Borrower could
obtain from an unrelated third party.
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(k) INVESTMENTS. None of the Borrowers shall 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) commercial paper rated A1/P1 or better by Standard & Poor's
Corporation/Xxxxx'x Investors Service, Inc., (v) repurchase agreements made
against securities which meet the qualifications stated herein, (vi) tax-exempt
securities, including without limitation, municipal bonds or notes, rated A or
better by Xxxxx'x Investors Service, Inc, or (vii) acquisitions in accordance
with the requirements of Section 8(c) hereof.
(l) PROPERTY. Each of the Borrowers 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 each of the Borrowers will furnish to the Bank,
upon its written request, full information with respect to any insurance
carried.
(m) BOOKS AND RECORDS. Each of the Borrowers 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 such Borrower with its officers and
employees and with its independent certified public accountants.
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(n) NOTICES. Each of the Borrowers will give, or cause to be given,
notice to the Bank, within five (5) days of knowledge thereof, of:
(i) the occurrence of any Default or Event of Default under
this Agreement;
(ii) any default or event of default under any other
contractual obligation of such Borrower which, if not paid or remedied by such
Borrower or waived by the obligee thereon, could result in liability to such
Borrower in excess of $500,000 in any single instance or $1,000,000 in the
aggregate;
(iii) any litigation, investigation or proceeding of which
such Borrower has knowledge which may exist at any time between such Borrower
and any governmental authority which may have a material adverse effect on the
business, operations, property or financial condition of such Borrower, any
litigation or proceeding affecting such Borrower which may have a material
adverse effect upon such 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 such Borrower knows thereof: (x) the occurrence of
any "reportable event" with respect to any "single employer plan" which in the
reasonable judgment of such Borrower could be expected to have a material
adverse affect on such Borrower or its business, (y) the institution of
proceedings or the taking or expected taking of any other action by such
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
such 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 such Borrower and its subsidiaries, taken as
a whole; and
(vi) the revocation, expiration or loss of any license, permit
or other governmental authorization of such Borrower material to the conduct of
the business of such Borrower and its subsidiaries, taken 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 or Chief Financial Officer of Dentex
setting forth details of the occurrence referred to therein and stating what
action, if any, such Borrower proposes to take with respect thereto.
(o) LIENS. None of the Borrowers will 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:
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(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 such 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 such
Borrower and identified on SCHEDULE 5(E) attached hereto;
(vi) purchase money liens securing additional Indebtedness
permitted under Section 6(q) hereof;
(vii) liens securing such Borrower's obligations under
operating leases; and
(viii) liens upon assets acquired after the Closing Date in
connection with any acquisition permitted under the terms of Sections 6(k) and
8(c) hereof PROVIDED that such liens shall not secure Indebtedness in an
aggregate amount in excess of $500,000.
In addition, none of the Borrowers shall, nor shall any of the
Borrowers permit any subsidiary to, enter into or permit to exist any
arrangement or agreement which directly or indirectly prohibits such Borrower or
any such subsidiary from creating or incurring any lien or encumbrance in favor
of the Bank under the Loan Documents.
(p) MODIFICATIONS. None of the Borrowers will not permit the
modification or waiver of or any change in any provisions of any agreement
relating to Indebtedness of such Borrower if such modification, waiver or change
could have a material adverse effect on the ability of such Borrower to perform
its obligations under this Agreement or the other Loan Documents (such effect to
be determined by the Bank in its sole discretion).
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(q) ADDITIONAL INDEBTEDNESS. None of the Borrowers shall 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 Agreement (including in conjunction with
an acquisition that is either funded by an advance under the Second 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 such
Borrower of contingent consideration in connection with the acquisition of one
or more businesses; (iii) trade indebtedness incurred in the ordinary course of
such Borrower's business; and (iv) Indebtedness in respect of Capital
Expenditures not exceeding $1,000,000 in the aggregate during any 12-month
period.
(r) PAYMENTS TO AFFILIATED PERSONS. None of the Borrowers shall 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) each of the Borrowers 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 such 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 such Borrower's capital stock from such Affiliated Persons
and (ii) any subsidiary of such Borrower may pay dividends and make
distributions to such 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 such Borrower.
(s) MINIMUM CONSOLIDATED NET WORTH. The Borrowers shall not permit
Consolidated Net Worth at any time to be less than $68,000,000.
(t) FIXED CHARGE COVERAGE RATIO. The Borrowers shall not permit the
Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than
1.5:1.0.
(u) MAXIMUM CONSOLIDATED TOTAL FUNDED DEBT TO CONSOLIDATED EBITDA. As
at the end of any fiscal quarter, the ratio of (a) Consolidated Total Funded
Debt as of such date to (b) Consolidated EBITDA for the period of four (4)
consecutive fiscal quarters ending on the date of calculation (i) prior to and
including December 31, 2005, shall not exceed 2.20: 1.0 and (ii) thereafter
shall not exceed 2.00:1.0.
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(v) MINIMUM CONSOLIDATED EBITDA. For the period of four (4) consecutive
fiscal quarters then ended, the Borrowers shall not permit Consolidated EBITDA
to be less than (i) $11,500,000 on June 30, 2005, (ii) $13,000,000 on September
30, 2005, (iii) $14,800,000 on December 31, 2005, (iv) $15,500,000 on March 31,
2006, (v) $15,900,000 on June 30, 2006, (vi) $16,400,000 on September 30, 2006,
(vii) $16,900,000 on December 31, 2006, (viii) $17,200,000 on March 31, 2007,
(ix) $17,500,000 on June 30, 2007, and (x) $17,800,000 on the last day of each
fiscal quarter thereafter.
(w) BANK ACCOUNTS. Dentex shall maintain its primary operating account
with the Bank. As of the Closing Date, none of the Borrowers and their
subsidiaries maintain any bank accounts other than as set forth on Schedule
6(v). For the avoidance of any doubt, it is hereby acknowledged that for the
purposes of this Section 6(v), "maintain its primary operating account" means
that Dentex shall maintain all of its cash management activities with the Bank
and, with respect to bank accounts established after the Closing Date, Dentex
shall use best efforts to establish such bank accounts with the Bank.
(x) FURTHER ASSURANCES At any time and from time to time each of the
Borrowers shall, and shall cause each of its subsidiaries to, execute and
deliver such further instruments and take such further action as may reasonably
be requested by the Bank to effect the purposes of this Agreement and the other
Loan Documents. Without limitation of the foregoing, upon receipt of an
affidavit of an officer of the Bank as to the loss, theft, destruction or
mutilation of any of the Notes, and, in the case of any such loss, theft,
destruction or mutilation, upon cancellation of such Note, each of the Borrowers
will issue, in lieu thereof, a replacement Note in the same principal amount
thereof and otherwise of like tenor.
7. CONDITIONS OF CLOSING The obligation of the Bank to make any
advances under a Line of Credit, to issue any new Letter of Credit and to fund
the Term Loan is subject to the satisfaction of all of the following conditions
on or prior to the Closing:
(a) AMENDED AND RESTATED LINE OF CREDIT NOTES; TERM NOTE The Bank shall
have received each of the Amended and Restated Line of Credit Notes and the Term
Note, duly executed and delivered by the Borrowers, each in form satisfactory to
the Bank and its special counsel. Upon receipt of the Notes, the Bank will
cancel the notes executed in connection with the Existing Loan Agreement, stamp
such notes as "cancelled", and return such cancelled notes to Dentex, at the
address on the first page of this Agreement.
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(b) WARRANTIES AND COVENANTS All warranties and representations of each
of the Borrowers and their subsidiaries in this Agreement and the other Loan
Documents shall be true on the date of the Closing as if then given, each of the
Borrowers and their subsidiaries shall have performed or observed all of the
terms, covenants, conditions and obligations under this Agreement 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 Dentex, 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 (i) the
2004 Financial Statements, together with the management letter for the fiscal
year ending December 31, 2004 for each of the Borrowers, (ii) the unaudited
consolidated balance sheets of Dentex and its consolidated subsidiaries as of
March 31, 2005, together with the related unaudited consolidated statements of
income for such period and for the portion of the fiscal year of the Borrowers
through such period, (iii) the opening pro forma balance sheet of the Borrowers
as of the date of Dentex's acquisition of Green (after giving effect thereto),
(iv) the pro forma income statement of the Borrowers as of December, 31 2004,
(v) five year projections for Dentex and its consolidated subsidiaries, and (vi)
audited financial statements of Green for the three fiscal years preceding the
Closing Date, in the case of (ii), (iii) and (iv) above, certified by the Chief
Financial Officer of Dentex as presenting fairly in all material respects the
financial condition and results of operations as of such date of Dentex and its
consolidated subsidiaries or each Borrower and its consolidated subsidiaries, as
applicable, 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), and Bank shall be satisfied with the foregoing.
There shall have been no material misstatements in, or omissions from, such
financial statements and any other documentation furnished to the Bank.
(e) ANNUAL REPORT The Bank shall have received copies of (i) Dentex's
Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and (ii)
Dentex's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2005.
(f) VALUATION REPORT The Bank shall have received a copy of the
valuation report prepared by Deloitte & Touche LLP, in form and substance
satisfactory to the Bank.
(g) NO ADVERSE CHANGE There shall have occurred no material adverse
change in (i) the business, prospects, operations, properties or condition
(financial or otherwise) of the Borrowers and any of their subsidiaries, taken
as a whole, since the date of the March 31, 2005 financial statements, or (ii)
the ability of any of the Borrowers or any of their subsidiaries to perform
their obligations under the Loan Documents.
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(h) CLOSING FEES AND LEGAL EXPENSES At or prior to the Closing, the
Borrowers shall have paid to the Bank (i) the annual $10,000 facility fee
referenced in Section 2(c)(ii) hereof, and (ii) all costs and expenses
(including legal fees) referred to in Section 12(h).
(i) LEGAL OPINIONS. All legal matters incident to this Agreement shall
be satisfactory to Goulston & Storrs, special counsel to the Bank, and the Bank
shall have received at the Closing the legal opinion of Xxxxxxxxx Xxxxxxxxxx &
Xxxx LLP, counsel to the Borrowers, and Xxxx Xxxxx Xxxxx Xxxx & Xxxxxxx, P.A,
special counsel to Green, such opinions in form and substance satisfactory to
the Bank and its special counsel.
(j) PROJECTIONS The Bank shall have received copies of Dentex and its
consolidated subsidiaries' base line fiscal quarter by fiscal quarter
projections for fiscal year 2005, including profit and loss, balance sheet, cash
flow and schedules reflecting branch profit and losses.
(k) APPROVALS All necessary consents, approvals and/or waivers in
connection with the consummation of the transactions contemplated by the Loan
Documents shall have been obtained by each of the Borrowers and copies thereof
shall have been delivered to the Bank.
(l) LEGALITY OF TRANSACTIONS No change in applicable law or regulation
shall have occurred as a consequence of which it shall have become and continue
to be unlawful (i) for the Bank to perform any of its respective agreements or
obligations under any of the Loan Documents, or (ii) for any of the Borrowers or
any of their subsidiaries to perform any of their agreements or obligations
under any of the Loan Documents.
(m) PROOF OF CORPORATE ACTION; GOOD STANDING The Bank shall have
received from each of the Borrowers and their subsidiaries a certificate,
certified by a duly authorized officer of each Borrower or subsidiary to be true
and complete on the Closing Date, (i) attaching a copy of records of all
corporate action taken by such Borrower or such subsidiary to authorize (a) its
execution and delivery of each of the Loan Documents to which it is or is to
become a party, (b) its performance of all of its agreements and obligations
under each of such documents, and (c) any borrowings and other transactions
contemplated by this Agreement, (ii) certifying as to its charter or other
organizational documents and its by-laws, and (iii) giving the name and bearing
a specimen signature of each individual who shall be authorized to sign, in the
name and on behalf of such Borrower, each of the Loan Documents to which it is
or is to become a party, to make application for the Loans and Letters of
Credit, and to give notices and to take other action on its behalf under the
Loan Documents.
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(n) PAYOFF AND RELEASE CONFIRMATION The Bank shall have received a
payoff and release letter with respect to all of Green's obligations to Heber
Springs State Bank (including termination of all liens securing such
obligations, if any).
(o) ORGANIZATIONAL AND CAPITAL STRUCTURE The organizational and capital
structure of each of the Borrowers and any of their subsidiaries shall be
reasonably satisfactory to the Bank.
(p) LIEN SEARCHES The Bank shall have received from the Borrowers the
results of lien searches (UCC, state tax, federal tax, judgment, litigation and
bankruptcy) with respect to Green, in the State of Arkansas, from a service
company reasonably satisfactory to the Bank, indicating no liens, mortgages or
other encumbrances on any of the Borrowers' property, assets or revenues, other
than liens permitted under Section 6(o) hereof, and otherwise in form and
substance satisfactory to the Bank.
(q) OTHER SEARCHES. 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 Agreement, 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 each of the Borrowers and
their 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 any applicable 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.
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(b) PERFORMANCE Each of the Borrowers and their subsidiaries shall have
performed and complied with all terms, conditions, covenants and obligations
under this Agreement 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 Borrowers for an advance under a Line of Credit
shall constitute certification by each of the Borrowers 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 Borrowers desire to make a drawing under the
Second Line of Credit, the proceeds of which may only be used to fund an
acquisition by a Borrower, then the obligation of the Bank to make any such
advance is subject to the satisfaction of the following conditions precedent on
or before the Borrowing Date for such advance:
(i) The entity whose business, assets or stock is to be
acquired by a Borrower with funds from the requested advance must be primarily
engaged in the dental laboratory business or a business closely related thereto;
(ii) Such Borrower shall have provided, or cause to be
provided, to the Bank, 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 Dentex 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) Such Borrower shall have provided, or cause to be
provided, to the Bank, (1) historical financial statements of the entity whose
business, assets or stock is to be acquired, as may be requested by Bank, and
(2) evidence satisfactory to the Bank in its sole discretion that the entity
whose business, assets or stock is to be acquired by such 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 such 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 Borrowers shall
have provided the Bank with evidence satisfactory to the Bank demonstrating the
Borrowers' compliance with all of their covenants and agreements under this
Agreement (including, but not limited to, the financial covenants set forth in
Sections 6(s) through (u), as evidenced by Borrowers' Compliance Certificate)
both prior to such acquisition and on a pro forma basis after giving effect to
such acquisition;
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(v) upon consummation of such acquisition, any corporation or
business entity acquired which remains a separate legal entity from the
Borrowers shall be a party to such of the Loan Documents as is required by the
Bank, as more fully described in Section 6(e)(vi) hereof; and
(vi) such Borrower shall have obtained the prior written
consent (such consent not to be unreasonably withheld) of the Bank for (1) any
single acquisition with a purchase price, whether payable in cash or other
consideration, that exceeds $4,000,000, and (2) in any event, at such time as
the aggregate purchase price for acquisitions after the Closing exceeds
$10,000,000, for any single acquisition with a purchase price, whether payable
in cash or other consideration, that exceeds $2,000,000. Bank shall respond to
Borrower's request for consent within five (5) Business Days of Borrowers'
providing Bank with the information and documents in accordance with this
Section 8(c).
9. EVENTS OF DEFAULT. Each of the following shall constitute an event
of default (an "EVENT OF DEFAULT") under this Agreement, the Amended and
Restated Line of Credit Notes, the Term Note and the other Loan Documents:
(a) REPRESENTATIONS AND WARRANTIES Any representation or warranty made
by any of the Borrowers or any of their subsidiaries in this Agreement 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 Agreement or
any other Loan Document, shall prove to be untrue in any material respect on the
date on which it is or was given.
(b) COVENANTS Any of the Borrowers or any of their subsidiaries shall
fail to perform or observe any covenant or condition contained or referred to in
this Agreement, any Amended and Restated Line of Credit Note or the Term Note,
including without limitation the failure to make any payment of principal or
interest on an Amended and Restated Line of Credit Note, the Term Note or other
amounts when due or any payment of any fee hereunder; provided, however, that
failure to make any payment of interest on an Amended and Restated Line of
Credit Note or of principal or interest on the Term Note shall not constitute an
Event of Default under this Agreement 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 Agreement until such failure shall
have continued uncured for 10 days.
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(c) ACCELERATION Any event occurs which permits the acceleration of the
maturity of any Indebtedness of any of the Borrowers or any of their
subsidiaries in excess of $500,000 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 any of the Borrowers or any
of their subsidiaries.
(d) LOAN DOCUMENTS. Any default or event of default shall occur under
any of the Loan Documents (other than a default or event of default that is
elsewhere specifically dealt with in this Section 9).
(e) VOLUNTARY BANKRUPTCY. Any of the Borrowers or any of their
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 any of the Borrowers or any of their 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 60 days; or an order for relief shall be entered against any of
the Borrowers or any of their subsidiaries under the federal bankruptcy laws as
now or hereafter in effect;
(g) SEIZURE OF ASSETS. There shall occur any seizure, vesting or
intervention by or under the authority of a governmental unit by which Dentex'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 $500,000 is
rendered or entered against any of the Borrowers or any of their subsidiaries
and not paid, satisfied or otherwise discharged within 60 days of the date such
judgment, order or writ becomes final and non-appealable.
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(i) LIENS. A notice of lien, levy or assessment is filed or recorded
with respect to any material part of the assets of the Borrowers and their
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 Borrowers
and their subsidiaries taken as a whole.
(j) CASUALTY LOSS. There shall occur any material casualty loss with
respect to a material part of any of the Borrowers' or any of their
subsidiaries' assets, taken as a whole.
(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) (A) 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 Dentex outstanding at
such time and (B) 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 Dentex; or (ii) Dentex shall fail to be the
beneficial owner of 100% of the capital stock or other ownership or profit
interests (whether voting or non-voting, and including all of the warrants,
options or other rights for the purchase or acquisition of shares of capital
stock or other ownership or profit interests) of Green and any other of Dentex's
subsidiaries; provided, however, that Dentex and any of its subsidiaries may
transfer all or any portion of its ownership interests in any subsidiary to
another direct or indirect subsidiary of Dentex; or (iii) Green shall fail to be
the beneficial owner of 100% of the capital stock or other ownership or profit
interests (whether voting or non-voting, and including all of the warrants,
options or other rights for the purchase or acquisition of shares of capital
stock or other ownership or profit interests) of any of its subsidiaries;
PROVIDED HOWEVER, that Green may transfer such capital stock or other ownership
interests in its subsidiaries to Dentex or any direct or indirect subsidiaries
of Dentex.
(m) ERISA. The occurrence of any of the following: (a) Any "prohibited
transaction" or "accumulated funding deficiency" shall have occurred with
respect to any "single employer plan" of the Borrowers to the extent such
occurrence would cause liability to the Borrowers or any of their subsidiaries
in an amount in excess of $500,000 per occurrence; (b) any "reportable event"
shall have occurred with respect to any "single employer plan" of the Borrowers
which in the reasonable judgment of the Borrowers could be expected to have a
material adverse effect on the Borrowers or their business, taken as a whole;
(c) the Borrowers, any predecessor to any of the Borrowers or any "commonly
controlled entity" shall have been included in a "multiemployer plan" as to
which such Borrower or any "commonly controlled entity" has liability because
such Borrower or any "commonly controlled entity" withdrew therefrom to the
extent such occurrence would cause liability to such Borrower or any of its
subsidiaries in an amount in excess of $500,000 per occurrence; (d) the
institution of proceedings or the taking of any other action by the Borrowers 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 to the extent such occurrence would cause liability to
the Borrowers or any of their subsidiaries in an amount in excess of $500,000
per occurrence; or (e) the "reorganization" or "insolvency" of any
"multiemployer plan" which may reasonably be expected to have a material adverse
effect on the business, operations, property or financial conditions of the
Borrowers, taken as a whole (as each of the quoted terms is defined or used in
ERISA or the Code).
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10. REMEDIES.
(a) Upon the occurrence and during the continuation of an Event of
Default under this Agreement, 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, under the Amended and Restated Line of Credit Notes or
under the Term Note 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 each of the Borrowers;
(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 Agreement 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 any of the Borrowers 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 Agreement or the other Loan Documents shall thereupon terminate and all
Loans and other amounts outstanding hereunder or under the Amended and Restated
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 each of the Borrowers.
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(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
Agreement and/or the Credit Facility described herein shall have expired or
shall have been earlier terminated by either the Bank or the Borrowers for any
reason, the Borrowers shall, promptly after they receive 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 Borrowers, such cash deposit to serve as cash collateral for the
Borrowers' 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 Borrowers shall deposit such amount
with the Bank forthwith without any notice or demand or any other act by the
Bank.
11. JOINT AND SEVERAL LIABILITY Each of the Borrowers is accepting
joint and several liability for all of the obligations arising hereunder or
under any of the other Loan Documents in consideration of the financial
accommodations to be provided by the Bank under this Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of each other Borrower to accept joint and several liability
for the Borrowers' obligations arising hereunder or under any of the other Loan
Documents.
(c) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrower with respect to the payment
and performance of all of the Borrowers' obligations arising hereunder or under
any of the other Loan Documents (including, without limitation, any obligations
arising under this Section 11), it being the intention of the parties hereto
that all of the obligations arising hereunder or under any of the other Loan
Documents shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them.
(d) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the obligations arising hereunder or under
any of the other Loan Documents as and when due or to perform any of the
obligations arising hereunder or under any of the other Loan Documents in
accordance with the terms thereof, then in each such event the other Borrower
will make such payment with respect to, or perform, such obligation.
(e) The obligations arising hereunder or under any of the other Loan
Documents of each of the Borrowers under the provisions of this Section 11
constitute full recourse obligations of each such Borrower enforceable against
each such Borrower to the full extent of its properties and assets, to the
fullest extent permitted by applicable law, irrespective of the validity,
regularity or enforceability of this Loan Agreement against any other Borrower
or any other circumstance whatsoever.
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(f) Each of the Borrowers hereby agrees that it will not enforce any of
its rights of contribution or subrogation against the other Borrower with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Bank with respect to any of the
obligations hereunder or under any of the other Loan Documents until such time
as all of the obligations hereunder or under any of the other Loan Documents
have been irrevocably paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to the Bank
hereunder or under any other Loan Document are hereby expressly made subordinate
and junior in right of payment, without limitation as to any increases in the
obligations arising hereunder or thereunder, to the prior payment in full of the
obligations hereunder or under any of the other Loan Documents and, in the event
of any insolvency, bankruptcy, receivership, liquidation, reorganization or
other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
obligations arising hereunder or under any of the other Loan Documents shall be
paid in full before any payment or distribution of any character, whether in
cash, securities or other property, shall be made to any other Borrower
therefor.
12. MISCELLANEOUS.
(a) WAIVERS This Agreement and the other Loan Documents may not be
changed, waived, discharged or terminated orally or in writing, except that any
term of this Agreement or any other Loan Document may be amended and the
performance or observance by the Borrowers of any term of this Agreement 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 Agreement and in
the other Loan Documents are cumulative and not exclusive of any right or remedy
which the Bank may otherwise have. To the extent the Bank holds any collateral
as security for payment or any of the other obligations arising hereunder or
under any of the other Loan Documents, 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
Amended and Restated Line of Credit Notes or the Term Note or any other
obligations of the Borrowers to the Bank under this Agreement or the other Loan
Documents or however arising. The Bank may extend the time for payment or
otherwise modify the terms of payment of any part or the whole of the Amended
and Restated Line of Credit Notes or the Term Note.
(c) NOTICES Any notices, consents or other communications to be given
under this Agreement 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
Agreement, with all such notices, consents and other communications to the Bank
to be sent to the attention of Xxxxx X. Xxxxx, 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, Goulston &
Storrs, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention: Xxxxxx
X. Xxxxxx, Esquire. A copy of each notice to the Borrowers shall also be sent to
the Borrowers' counsel, Xxxxxxxxx Xxxxxxxxxx & Xxxx LLP, 800 Boylston Street,
Prudential Tower, Boston, Massachusetts 02199-8004, Attention: Xxxxxx X. Xxxxxx,
P.C. Section headings and defined terms in this Agreement 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.
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(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
Borrowers or any of their subsidiaries may, at any time or from time to time,
without notice to any of the Borrowers or any of their 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; WAIVER OF JURY TRIAL. Each of the Borrowers, for
itself and its subsidiaries, irrevocably submits to 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 Agreement or
any other Loan Document, and each of the Borrowers, for itself and its
subsidiaries, waives and agrees not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claim that such 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 such 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 Agreement or any other Loan Document or the
subject matter hereof or thereof may not be enforced in or by such court. EACH
OF THE BORROWERS AND THE BANK HEREBY MUTUALLY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
EACH PARTY HERETO CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO EXECUTE THIS AGREEMENT AND
MAKE THE LOANS AND EXTEND CREDIT TO BORROWERS.
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(f) USURY. All agreements between the Borrowers and the Bank are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Bank for the use or the
forbearance of the indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law" shall mean the
law in effect as of the date hereof; provided, however, that in the event there
is a change in the law which results in a higher permissible rate of interest,
then the Amended and Restated Line of Credit Notes and the Term Note shall be
governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Borrowers and Bank in the execution,
delivery and acceptance of the Amended and Restated Line of Credit Notes and the
Term Note to contract in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the Loan Documents
at the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from any circumstances whatsoever Bank should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between the
Borrowers and the Bank.
(g) EXECUTION. This Agreement may be signed in any number of
counterparts, which together will be one and the same instrument. This Agreement
shall become effective whenever each party shall have signed at least one such
counterpart.
(h) GOVERNING LAW. This Agreement 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.
(i) FEES; INDEMNIFICATION. Whether or not any funds are disbursed
hereunder, each of the Borrowers shall pay all of the Bank's reasonable costs
and expenses in connection with the preparation, execution, delivery, review,
administration and enforcement of this Agreement and the other Loan Documents,
including reasonable legal fees and disbursements. Each of the Borrowers 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
Agreement and the other Loan Documents or any of the transactions contemplated
hereby or thereby; provided that the Borrowers 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.
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(j) BINDING NATURE. This Agreement 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 Agreement and under
any of the other Loan Documents may not be assigned by any of the Borrowers
without the written consent of the Bank.
(k) ASSIGNMENT; PARTICIPATIONS; PLEDGE TO FEDERAL RESERVE. (i) The Bank
shall have the unrestricted right at any time or from time to time, and without
any of the Borrowers' consent, to assign all or any portion of its rights and
obligations hereunder to one or more banks or other financial institutions
(each, an "ASSIGNEE"), after giving at least 15 Business Days prior written
notice of such assignment to the Borrowers, and the Borrowers agree that it
shall execute, or cause to be executed, such documents, including without
limitation, amendments to this Agreement and to any other documents, instruments
and agreements executed in connection herewith as Bank shall deem necessary to
effect the foregoing. In addition, at the request of Bank and any such Assignee,
the Borrowers shall issue one or more new promissory notes, as applicable, to
any such Assignee and, if Bank has retained any of its rights and obligations
hereunder following such assignment, to Bank, which new promissory notes shall
be issued in replacement of, but not in discharge of, the liability evidenced by
the promissory note held by Bank prior to such assignment and shall reflect the
amount of the respective commitments and Loans held by such Assignee and Bank
after giving effect to such assignment. Upon the execution and delivery of
appropriate assignment documentation, amendments and any other documentation
required by Bank in connection with such assignment, and the payment by Assignee
of the purchase price agreed to by Bank and such Assignee, such Assignee shall
be a party to this Agreement and shall have all of the rights and obligations of
Bank hereunder (and under any and all other guaranties, documents, instruments
and agreements executed in connection herewith) to the extent that such rights
and obligations have been assigned by Bank pursuant to the assignment
documentation between Bank and such Assignee, and Bank shall be released from
its obligations hereunder and thereunder to a corresponding extent.
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(ii) Bank shall have the unrestricted right at any
time and from time to time, and without the consent of any of the Borrowers,
after giving at least 15 Business Days prior written notice of such grant to the
Borrowers, to grant to one or more banks or other financial institutions (each,
a "PARTICIPANT") participating interests in the Bank's obligation to lend
hereunder and/or any or all of the Loans held by Bank hereunder. In the event of
any such grant by Bank of a participating interest to a Participant, the Bank
shall remain responsible for the performance of its obligations hereunder and
the Borrowers shall continue to deal solely and directly with Bank in connection
with Bank's rights and obligations hereunder.
(iii) The Bank may furnish any information concerning
the Borrowers in its possession from time to time to prospective Assignees or
Participants, provided that the Bank shall require any such prospective Assignee
or Participant to agree in writing to maintain the confidentiality of such
information.
(iv) Notwithstanding any of the foregoing, the Bank
may at any time pledge or assign all or any portion of its rights under the Loan
Documents including any portion of the Amended and Restated Line of Credit Notes
or the Term Note to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
assignment or enforcement thereof shall release the Bank from its obligations
under any of the Loan Documents.
(l) UNDER SEAL. This Agreement shall be deemed to be an instrument
under seal and shall continue in full force and effect so long as any
indebtedness of any of the Borrowers to the Bank remains unpaid.
(m) USE OF PROCEEDS. Borrowers (i) for working capital purposes of the
Borrower, (ii) to refinance existing Indebtedness of the Borrowers, (iii) in the
case of the Second Line of Credit, to fund acquisitions by the Borrower, to the
extent permitted herein, and (iv) in the case of the Term Loan, to pay the
outstanding balance under the Second Line of Credit on the Closing Date. No
portion of the proceeds of any loans shall be used, and no portion of any Letter
of Credit is to be obtained, in whole or in part, for the purpose of purchasing
or carrying any "margin security" or "margin stock" as such terms are used in
Regulations U, T or X of the Board of Governors of the Federal Reserve System.
(n) CONFIDENTIALITY. Notwithstanding any confidentiality provisions
contained herein, and in accordance with Section 1.6011-4(b)(3)(iii) of the
Treasury Regulations, each party to this Agreement (and each employee,
representative, or other agent of each party) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure; provided, however, that,
pursuant to Section 1.6011-4(b)(3)(ii) of the Treasury Regulations, such
disclosure shall not be permitted to the extent, but only to the extent, such
disclosure would reasonably be considered to result in noncompliance with the
securities laws of any applicable jurisdiction. For the avoidance of doubt, the
parties acknowledge and agree that the tax treatment and tax structure of any
transaction does not include the name of any party to a transaction or any
sensitive business information (including, without limitation, specific
information about any party's intellectual property or other proprietary assets)
unless such information may be related or relevant to the purported or claimed
federal income tax treatment of the transaction.
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If you agree with the terms of this Agreement, 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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Xxxxxxxxx XXXX XX
XXXXXXX, N.A.
By: /S/ XXXXX X. XXXXX
-----------------------
Name: Xxxxx X. Xxxxx
Title: SVP
ACCEPTED AND AGREED TO:
NATIONAL DENTEX CORPORATION
By: /S/XXXXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive V.P., Treasurer & CFO
GREEN DENTAL LABORATORIES, INC.
By: /S/ XXXXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Treasurer
Signature Page to Amended and Restated Loan
