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EXHIBIT 10.27
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is
entered into as of (but not necessarily on) the 30th day of June, 1999, by and
among Monarch Dental Corporation, a Delaware corporation ("Borrower"), Bank of
America, N.A., a national banking association, (formerly NationsBank, N.A.,
successor in interest by merger to NationsBank of Texas, N.A.) ("Administrative
Agent") for itself and as Administrative Agent, and the lending institutions
designated as "Lenders" on Schedule I hereto (as modified from time to time).
PRELIMINARY STATEMENT
I. Administrative Agent, Borrower and certain of the Guarantors previously
executed that certain Amended and Restated Loan Agreement (as modified and
amended, the "Original Loan Agreement") dated as of November 4, 1997, wherein
Administrative Agent and Bank of America agreed to make a revolving credit
facility and a term facility available to Borrower and certain of the Guarantors
in an aggregate amount not to exceed Seventy-Five Million and No/100 Dollars
($75,000,000).
II. Borrower has requested that Administrative Agent and Lenders modify, amend
and restate the Original Loan Agreement. Upon and subject to the terms of this
Agreement and each of the other Loan Documents, Administrative Agent and Lenders
are willing to modify, amend and restate the Original Loan Agreement.
Accordingly, in consideration of the mutual covenants contained herein,
Borrower, Administrative Agent and Lenders agree as follows:
ARTICLE I
TERMS DEFINED
SECTION 1.1. Definitions. The following terms, as used herein, have
the following meanings:
Account means any and all "Accounts" as that term is defined in the
Security Agreement.
Acquisition means any transaction pursuant to which Borrower or any of
its Subsidiaries, (a) whether by means of a capital contribution or purchase or
other acquisition of stock or other securities or other equity participation or
interest, (i) acquires more than 50% of the equity interest in any Person
pursuant to a solicitation by Borrower or such Subsidiary of tenders of equity
securities of such Person, or through one or more negotiated block, market,
private or other transactions, or a combination of any of the foregoing, or (ii)
makes any corporation a Subsidiary of Borrower or such Subsidiary, or causes any
corporation, other than a Subsidiary of
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Borrower or such Subsidiary, to be merged into Borrower or such Subsidiary (or
agrees to be merged into any other corporation other than a wholly-owned
Subsidiary (excluding directors' qualifying shares) of Borrower or such
Subsidiary), or (b) purchases all or substantially all of the business or assets
of any Person or of any operating division of any Person.
Acquisition Date means, for any entity, the effective date on which
such entity was acquired by Borrower or its Subsidiaries.
Actual Taxes means, for the twelve (12) month period immediately
preceding the date of determination, the aggregate amount of Taxes paid by
Borrower and its Subsidiaries.
Additional Spread means, if Borrower has not closed the Required
Institutional Debt and made the repayments with the proceeds thereof as required
by this Agreement on or before October 1, 1999, an additional interest rate
spread equal to 0.25% per annum, which Additional Spread shall be included in
the calculation of the Adjusted LIBOR Rate and the Variable Rate from such date
until Borrower closes the Required Institutional Debt and makes the repayments
with the proceeds thereof as required by this Agreement.
Adjusted LIBOR Rate shall mean on the applicable Effective Date, with
respect to a LIBOR Rate Advance, a rate per annum equal to the sum of (a) the
quotient of (i) the LIBOR Rate on the applicable Effective Date, divided by (ii)
the remainder of 1.00 minus the LIBOR Reserve Requirement, if any, on the
applicable Effective Date, plus (b) the FDIC Percentage in effect on the
applicable Effective Date, together with any additional impositions,
assessments, fees or surcharges that may be imposed on Administrative Agent or
any Lender (expressed as a percentage), to the extent such impositions,
assessments, fees or surcharges are not reflected in the FDIC Percentage or the
LIBOR Reserve Requirement and are generally imposed on banks with capitalization
and supervisory risk factors comparable to Administrative Agent, plus (c) the
LIBOR Margin, plus (d) the Rate Enhancement Spread, plus (e) if applicable, the
Additional Spread.
Administrative Agent means Bank of America, in its capacity as
administrative agent for the Lenders hereunder, or any successor Administrative
Agent pursuant to Section 9.13 or any agreement entered into pursuant to Section
9.16.
Administrative Fee means an aggregate annual fee of Fifteen Thousand
and No/100 Dollars ($15,000.00).
Advance means an advance made by Lenders to Borrower under the Credit
Facility (including the Swingline Advances) pursuant to the terms and conditions
of this Agreement.
Affiliate means, as to any Person, any Subsidiary of such Person, or
any Person which, directly or indirectly, controls, is controlled by, or is
under common control with such Person. For the purposes of this definition,
"control" means the possession of the power to direct or cause
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 2
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the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
Agreement means this Amended and Restated Loan Agreement and all
renewals, extensions, modifications, amendments and rearrangements
thereof.
Amendment Fee has the meaning set forth in Section 2.3(d).
Applicable Environmental Laws has the meaning set forth in Section 6.7.
Applicable Rate has the meaning set forth in Section 3.3.
Assets means all of the assets of any Person, real, personal or
otherwise, which are included on a balance sheet of such Person prepared in
accordance with GAAP.
Assignment and Acceptance has the meaning set forth in Section 10.10.
Xxxxxxxx Judgment means the judgment rendered against Managed Dental
Care Centers, Inc. in favor of Xxxxxxx X. Xxxxxxxx, D.D.S. under Cause No.
97-13894 in the District Court of Xxxxxx County, Texas, 98th Judicial District.
Authorized Borrowing Officer means an Authorized Officer of Borrower.
Authorized Officer means, as to any Person that is a corporation, any
of its Chairman, Vice-Chairman, President, Executive Vice President(s), Chief
Executive Officer, Chief Financial Officer or Treasurer, or as to any other
Person, if such Person is a partnership, the partnership's general partner or
other Person authorized by appropriate action to execute the Loan Documents or
any other documents or certificates to be executed by such Person hereunder or
in connection with any Advance or Letter of Credit.
Available Commitment means the aggregate Loan Commitment Amounts
committed by the Lenders under this Agreement on the date of determination,
evidenced by promissory notes to be made by Borrower to each Lender in the
amount of such Lender's applicable Loan Commitment Amount.
Bank of America means Bank of America, N.A. (formerly NationsBank,
N.A., successor in interest by merger to NationsBank of Texas, N.A.), and its
successors.
Base Rate means, on any date of determination, the rate of interest per
annum most recently announced by Administrative Agent as its prime rate in
effect at its principal office (which, in the case of Bank of America, shall
mean its principal office in Dallas, Texas), automatically fluctuating upward
and downward until and at the time specified in each such announcement without
special notice to Borrower or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to a customer.
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Base Rate Spread means the applicable "Base Rate Spread" as shown on,
and as determined in accordance with, Schedule II attached hereto. The Base Rate
Spread is subject to reduction or increase as provided in Schedule II.
Borrower has the meaning set forth in the introductory paragraph of
this Agreement.
Business Day means (a) for all purposes other than as covered by clause
(b) of this definition, any day of the week, other than Saturday, Sunday or
other day Administrative Agent or any Lender is required or authorized by law or
executive order to close, and (b) with respect to all requests, notices and
determinations in connection with LIBOR Rate Advances, a day which is a Business
Day described in clause (a) of this definition and which is a day for trading by
and between banks for Dollar deposits in the London interbank market.
CERCLA has the meaning set forth in Section 6.7.
Closing Date means the date that this Agreement is executed.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means all property, assets and interests of any kind
securing the Credit Facility (including, without limitation, all Advances and
the Letters of Credit) pursuant to this Agreement or any of the other Loan
Documents.
Collateral Assignment of Partnership Interests means that certain
Collateral Assignment of Partnership Interests, executed by the Parent Companies
and Administrative Agent, securing the payment of the Notes and the payment and
performance of all the Obligations, and collaterally assigning to Administrative
Agent (on behalf of Lenders) all of the Parent Companies' right, title and
interest in and to all of the partnership interests of Monarch Dental and
MacGregor Dental owned by them, and all renewals, extensions, modifications,
supplements and replacements thereof, which Collateral Assignment of Partnership
Interests shall be in form acceptable to Administrative Agent.
Consequential Loss has the meaning set forth in Section 3.6(d).
Consolidated Capitalization means, as of any date, the sum of (a)
Consolidated Funded Debt plus (b) Consolidated Net Worth.
Consolidated Capital Lease Expense means for any period the lease
expense of Borrower and its Subsidiaries under all leases which are treated as
capital leases in accordance with GAAP.
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Consolidated Current Maturities means, with respect to Borrower and its
Subsidiaries, on any date of calculation, the current portion of the long term
debt of Borrower and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP.
Consolidated Debt of any Person means at any date, all Debt which is
required to be shown as such on the financial statements of such Person and its
Subsidiaries, on a consolidated basis, prepared in accordance with GAAP.
Consolidated Debt Service means, for any period, the sum of (a)
Consolidated Interest Expense plus (b) Consolidated Capital Lease Expense, plus
(c) Consolidated Principal Reduction.
Consolidated EBITDA means, with respect to any period, determined in
accordance with GAAP on a consolidated basis for Borrower and its Subsidiaries,
the sum of (a) Consolidated Net Income plus (b) Taxes (to the extent that such
amounts have been deducted in determining Consolidated Net Income for such
period), plus (c) Consolidated Interest Expense (to the extent that such amounts
have been deducted in determining Consolidated Net Income for such period), plus
(d) all amounts attributable to depreciation and/or amortization of intangible
and other assets of Borrower (to the extent that such amounts have been deducted
in determining Consolidated Net Income for such period), plus (or minus) (e) any
other non-cash charges to the extent deducted (or included) in determining
Consolidated Net Income for such period; provided that, in calculating
"Consolidated EBITDA, that portion of Consolidated EBITDA which is attributable
to an Acquisition which occurred less than 12 months prior to the date of
determination shall be calculated, rather than on a trailing 12 month basis as
provided above, by annualizing the actual Target Company EBITDA for the period
since the related Acquisition Date.
Consolidated Funded Debt means, as of any date, all Debt which is
evidenced by promissory notes, loan agreements, bonds, capital leases or similar
instruments, as such amount is required to be shown on the financial statements
of Borrower and its Subsidiaries, on a consolidated basis, prepared in
accordance with GAAP.
Consolidated Interest Expense means, for any period, the interest
expense which is required to be shown as such on the financial statements of
Borrower and its Subsidiaries, on a consolidated basis, prepared in accordance
with GAAP.
Consolidated Lease Expense means for any period the lease expense under
all Operating Leases for Borrower and its Subsidiaries on a consolidated basis.
Consolidated Net Income means, for any period, the net income after
Taxes of Borrower and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
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Consolidated Net Worth means, as of any date, shareholders' equity, as
shown on a balance sheet of Borrower and its Subsidiaries, on a consolidated
basis, prepared in accordance with GAAP.
Consolidated Principal Reduction means, for any period, amounts paid in
reduction of regularly scheduled principal maturing under any Consolidated
Funded Debt, which is required to be shown as such on the financial statements
of Borrower and its Subsidiaries, on a consolidated basis, prepared in
accordance with GAAP.
Consolidated Senior Funded Debt means Borrower's Consolidated Funded
Debt minus the sum of (i) Subordinate Acquisition Debt and (ii) Permitted
Subordinate Institutional Debt.
Credit Facility means the credit facility created pursuant to this
Agreement in an amount equal to the lesser of (a) $75,000,000, or (b) the
Available Commitment.
Credit Period means the period commencing on the date of this Agreement
and ending on the Termination Date.
Debt of any Person means at any date, without duplication, (a) all
indebtedness, obligations and liabilities of such Person for borrowed money, (b)
all indebtedness, obligations and liabilities of such Person evidenced by bonds,
debentures, notes or other similar instruments, whether recourse or non-recourse
and whether secured or unsecured, (c) all other indebtedness (including
capitalized lease obligations) of such Person on which interest charges are
customarily paid or accrued, (d) all obligations for indebtedness in respect of
Guarantees by such Person, (e) the unfunded or unreimbursed portion of all
letters of credit issued for the account of such Person, and (f) all personal
liability of such Person as a general partner or joint venturer of a partnership
or joint venture for obligations of such partnership or joint venture of the
nature described in (a) through (e) preceding.
Default means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
Default Rate means the fluctuating per annum rate of interest equal to
the lesser of (a) the Variable Rate plus 2% or (b) the Maximum Lawful Rate.
Dental Practice Laws means Tex. Rev. Civ. Stat. Xxx. art. 4543 et. seq.
(West 1996), as amended from time to time; any successor statute(s) thereto; all
rules and regulations promulgated thereunder and any other Law related to the
practice of dentistry in the states where the Providers are doing business.
Designated Successor Administrative Agent means, at any given time, the
Lender other than Administrative Agent which has the largest Loan Percentage;
provided, however, if two or more such Lenders have the same Loan Percentage at
such time, then the Designated Successor
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Administrative Agent shall be such of those Lenders having the same Loan
Percentage which has the largest net worth; and, provided further, that if the
Required Lenders object to the newly named Designated Successor Administrative
Agent, or if any Lender determined to be a Designated Successor Administrative
Agent declines to serve as successor Administrative Agent, in writing delivered
to the outgoing Administrative Agent within seven (7) Business Days after such
Designated Successor Administrative Agent is determined, then the Lender other
than Administrative Agent or such rejected or declining Designated Successor
Administrative Agent which has the next largest Loan Percentage shall be the
Designated Successor Administrative Agent. For each such Lender that is a member
of a bank holding company, its net worth shall be deemed to be the consolidated
net worth of its bank holding company.
Distribution by any Person, means (a) with respect to any stock issued
by such Person or any partnership or joint venture interest of such Person, the
retirement, redemption, repurchase, or other acquisition for value of such
stock, partnership or joint venture interest, (b) the declaration or payment
(without duplication) of any dividend or other distribution, whether monetary or
in kind, on or with respect to any stock, partnership or joint venture of any
Person, and (c) any other payment or distribution of assets of a similar nature
or in respect of an equity investment.
Dollars and the "$" symbol shall refer to currency of the United States
of America.
Effective Date has the meaning set forth in Section 3.5.
Eligible Assignee means (a) a Lender; (b) an Affiliate of a Lender; and
(c) any other Person approved by the Administrative Agent and, unless an Event
of Default has occurred and is continuing at the time any assignment is effected
in accordance with Section 10.10, Borrower, such approval not to be unreasonably
withheld or delayed by Borrower and such approval to be deemed given by Borrower
if no objection is received by the assigning Lender and Administrative Agent
from Borrower within two Business Days after notice of such proposed assignment
has been provided by the assigning Lender to Borrower; provided, however, that
neither Borrower nor an Affiliate of Borrower shall qualify as an Eligible
Assignee.
Employee Plan means at any time an employee benefit plan as defined in
Section 3(3) of ERISA that is now or was previously maintained, sponsored or
contributed to by Borrower or any Guarantor or by any Person that at such time
is or was an ERISA Affiliate of Borrower or any Guarantor.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all regulations issued pursuant
thereto.
ERISA Affiliate means any Person that is treated as a single employer
with Borrower or any Guarantor under Section 414 of the Code.
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Event of Default has the meaning set forth in Section 8.1.
Exchange Act shall mean the Securities Exchange Act of 1934, as
amended.
FDIC Percentage shall mean, on any day, the net assessment rate
(expressed as a percentage rounded to the next highest 1/100 of 1%) which is in
effect on such day (under the regulations of the Federal Deposit Insurance
Corporation or any successor) for determining the assessments paid by
Administrative Agent to the Federal Deposit Insurance Corporation (or any
successor) for insuring Eurocurrency deposits made in Dollars at Administrative
Agent's principal offices (which for Bank of America shall be its offices in
Dallas, Texas). Each determination of said percentage made by Administrative
Agent shall, in the absence of manifest error, be binding and conclusive.
Federal Funds Rate means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
Fiscal Year means any fiscal year of Borrower commencing on January 1
and ending on December 31.
Fixed Charge Coverage Ratio means, for any date of determination and
computed for the immediately preceding twelve month period, the ratio of (a) the
difference between (i) the sum of (A) Consolidated EBITDA plus (B) Consolidated
Lease Expense, less (ii) Maintenance Capital Expenditures, to (b) the sum of (i)
Consolidated Interest Expense, plus (ii) Consolidated Current Maturities, plus
(iii) Consolidated Lease Expense, plus (iv) Consolidated Capital Lease Expense,
plus (v) Actual Taxes. The amount of the Consolidated Net Income, Consolidated
Lease Expense and Consolidated Interest Expense to be included in computing the
Fixed Charge Coverage Ratio shall be the actual amount of such items incurred
during the relevant periods.
Fraud and Abuse Laws means Section 1128B(b) of the Social Security Act,
42 U.S.C. Section 1320a-7b(b), 42 U.S.C. Section 1877, and Texas Health & Safety
Code Xxx ss. 161.091-161.094 (West 1996), as amended from time to time; any
successor statute(s) thereto; all rules and regulations promulgated thereunder;
and any other Law relating to the ownership of dental facilities by providers of
dental services or the referral of patients to dental facilities owned by
providers of dental services.
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GAAP means generally accepted accounting principles consistently
applied as in effect at the time of application of the provisions hereof;
provided, however, that wherever in this Agreement principles of consolidation
different from those required by generally accepted accounting principles are
specified, the principles of consolidation specified in this Agreement shall
govern.
Governmental Authority means any government, any state or other
political subdivision thereof, or any Person exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Guarantors means all of the Subsidiaries of Borrower and any other
Person now or hereafter liable for payment of any of the Obligations or
performance of any obligations of Borrower under the Loan Documents, whether one
or more, and if more than one, each one individually.
Guaranty by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreements
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions, by "comfort letter" or other
similar undertaking of support or otherwise), or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guaranty shall not
include endorsements for collection or deposit in the ordinary course of
business.
Hypothetical Fixed Charge Coverage Ratio means, for any date of
determination and computed for the immediately preceding twelve month period,
the ratio of (a) the total of (i) Consolidated EBITDA plus (ii) Consolidated
Lease Expense, minus (iii) Maintenance Capital Expenditures, to (b) the sum of
(i) Consolidated Interest Expense, plus (ii) Consolidated Current Maturities,
plus (iii) Implied Amortization, plus (iv) Consolidated Lease Expense, plus (v)
Consolidated Capital Lease Expense, plus (vi) Actual Taxes. The amount of the
Consolidated Net Income, Consolidated Lease Expense and Consolidated Interest
Expense to be included in computing the Hypothetical Fixed Charge Coverage Ratio
shall be the actual amount of such items incurred during the relevant periods.
Implied Amortization means, as of any date of determination, the
product of (a) one-seventh (1/7) times (b) the aggregate amount of Advances
outstanding under the Credit Facility.
Impositions means all real estate and personal property taxes; charges
for any easement, license or agreement maintained for the benefit of any of the
real property of Borrower or Guarantors, or any part thereof; and all other
taxes, charges and assessments and any interest,
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costs or penalties with respect thereto, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature whatsoever, which
at any time prior to or after the execution hereof may be assessed, levied or
imposed upon any of the real property of Borrower or Guarantors, or any part
thereof, or the ownership, use, sale, occupancy or enjoyment thereof, in each
case which, if not timely paid or otherwise discharged, would materially and
adversely affect (a) such ownership, use, sale, occupancy or enjoyment, or (b)
the financial condition of Borrower or any Guarantor.
Institutional Debt means Debt of Borrower in favor of a "qualified
institutional buyer" (as defined in 17 C.F.R. Section 230.144A).
Interest Adjustment Date shall mean the earlier of either the last day
of an Interest Period or the Termination Date.
Interest Hedge Agreements means any and all agreements, devises or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, including, but not limited to, interest rate cap
or collar protection agreements, interest rate swap agreements or interest rate
options, as the same may be amended or modified and in effect from time to time,
and any and all terminations or assignments of any of the foregoing.
Interest Period shall mean, with respect to a LIBOR Rate Advance, a
period selected by Borrower of 30, 90 or 180 days, commencing on the Effective
Date of any LIBOR Rate Advance; provided that any Interest Period ending on a
date later than the Termination Date shall be deemed to end on the Termination
Date.
Issuing Lender means Bank of America in its capacity as issuer of the
Letters of Credit.
Law or Laws means all applicable constitutional provisions, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
Legal Requirements means (a) any and all present and future judicial
decisions, Laws, rulings, permits, licenses or certificates, in any way
applicable to Borrower or any Guarantor, (b) the presently or subsequently
effective partnership agreements, bylaws, articles of incorporation and any
other form of business association agreement of Borrower or Guarantors, and (c)
any and all leases or contracts (written or oral) of any nature that relate in
any way to Borrower's or Guarantor's Assets, or to which Borrower or any
Guarantor may be bound, and in each case which, if violated, would materially
and adversely affect (i) the present or potential ownership, use, sale,
occupancy or possession of Borrower's or any Guarantor's Assets, by Borrower or
such Guarantor, or (ii) the financial condition of Borrower or any Guarantor.
Lenders means each of the financial institutions listed as a "Lender"
on Schedule I attached hereto as the same may be modified or amended from time
to time.
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Letter of Credit Exposure means the aggregate amount of the unfunded
portion of each Letter of Credit outstanding at any time.
Letter of Credit Fee has the meaning set forth in Section 2.3(b).
Letters of Credit means all letters of credit issued by the Issuing
Lender for the account of Borrower pursuant to this Agreement.
LIBOR Margin means the applicable "LIBOR Margin" as shown on, and as
determined in accordance with, Schedule II attached hereto. The LIBOR Margin is
subject to reduction or increase as provided in Schedule II.
LIBOR Rate means, for any LIBOR Rate Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR Rate" shall mean, for any LIBOR Rate
Advance for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
LIBOR Rate Advance shall mean an Advance which bears interest computed
with reference to the Adjusted LIBOR Rate (including, without limitation,
Swingline Advances).
LIBOR Reserve Requirement shall mean, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such date, as provided
by the Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Administrative Agent (including, without
limitation, basic supplemental, marginal and emergency reserves) under
Regulation D with respect to "Eurocurrency liabilities" as currently defined in
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding (or, if reserves for
Eurocurrency liabilities are not separately stated in such regulations, the
other applicable category of liabilities which includes deposits by reference to
which the interest rate on a LIBOR Rate Advance is determined). Each
determination by Administrative Agent of the LIBOR Reserve Requirement, shall,
in the absence of manifest error, be conclusive and binding.
Lien means with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a
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Person shall be deemed to own subject to a Lien any asset which it has acquired
or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating to
such asset.
Loan Commitment Amount means, with respect to each Lender, the amount
indicated as such Lender's Loan Commitment Amount opposite the name of such
Lender with respect to the Credit Facility in Schedule I, as such amount (a) may
be reduced from time to time, as a result of a reduction in the Available
Commitment as provided in this Agreement, or (b) may be adjusted from time to
time to account for any assignment of a Lender's interest as provided in Section
10.10.
Loan Documents means this Agreement, the Notes, the Security Agreement,
the Letters of Credit, the LOC Applications and all other agreements,
guarantees, security agreements, assignments, statements, certificates,
documents or instruments evidencing, guaranteeing, securing or pertaining to the
Credit Facility (including the Letters of Credit) or otherwise executed and/or
delivered from time to time pursuant to or in connection with this Agreement, as
the same may be modified, amended, renewed, extended, rearranged, restated or
replaced from time to time.
Loan Percentage means, with respect to each Lender, the percentage
indicated as such Lender's Loan Percentage opposite the name of such Lender on
Schedule I, as such percentage may be adjusted from time to time to account for
any assignments of a Lender's interest as provided in Section 10.10.
LOC Application has the meaning set forth in Section 2.2(d).
MacGregor Dental means, MacGregor Dental Associates, L.P., a Texas
limited partnership.
Maintenance Capital Expenditures means, for the twelve (12) month
period immediately preceding the date of determination, the aggregate amount
paid by Borrower and its Subsidiaries for expenditures which were capitalized in
accordance with GAAP; provided, that initial capital expenditures in connection
with the opening of a new branch clinic or office (including, without
limitation, expenses for conversion of computer equipment subsequent to an
Acquisition and initial costs related to signage) shall be excluded from such
aggregate amount.
Management Services Agreements means, collectively, the Management
Services Agreements entered into by and between Modern Dental and each of
Monarch Dental and MacGregor Dental, as amended, from time to time, and any
other such agreement entered into during the Credit Period between Borrower or
any Subsidiary of Borrower and Modern Dental Professionals - Xxxxxxxxxxxx, P.C.,
Modern Dental Professionals - Indiana, P.C., or any other entity formed for the
purpose of employing professionals in the practice of dentistry.
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 12
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Margin Regulations mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
Margin Stock means "margin stock" as defined in Regulation U.
Material Adverse Effect means any event or condition which, singly or
in the aggregate with other events or conditions, materially and adversely
affects the business, operations, or financial condition of Borrower and its
Subsidiaries taken as a whole.
Maximum Lawful Rate means the maximum rate (or, if the context so
permits or requires, an amount calculated at such rate) of interest which, at
the time in question would not cause the interest charged on the Credit Facility
at such time to exceed the maximum amount which Lenders would be allowed to
contract for, charge, take, reserve, or receive under applicable federal or
state law after taking into account, to the extent required by applicable law,
any and all relevant payments, fees or charges under the Loan Documents. If and
to the extent the laws of the State of Texas are applicable for purposes of
determining the "Maximum Lawful Rate", such term shall mean the "weekly ceiling"
from time to time in effect under Chapter 303 of the Texas Finance Code, as
amended. If under federal or state law there is no legal limitation on the
amount or rate of interest that may be charged on amounts outstanding under the
Credit Facility, there shall be no Maximum Lawful Rate, notwithstanding any
reference thereto herein or in any of the Loan Documents.
Minimum Notice Requirement has the meaning set forth in Section 3.5.
Minor Acquisitions means Acquisitions in which the Total Acquisition
Price is less than or equal to Three Million and No/100 Dollars ($3,000,00.00).
Modern Dental means, Modern Dental Professionals, P.C., a Texas
professional corporation.
Monarch Dental means Monarch Dental Associates, L.P., a Texas limited
partnership.
Notes means (i) the promissory notes in the form attached hereto as
Exhibit A to be issued by Borrower to each Lender in the amount of such Lender's
Loan Commitment Amount, and (ii) the Swingline Note.
Obligations means all present and future indebtedness, obligations and
liabilities, or any part thereof, of Borrower or Guarantors now or hereafter
existing or arising under or in connection with this Agreement, the Notes or any
other of the Loan Documents (specifically including, without limitation, the
principal amount outstanding under the Notes), pursuant to the Loan Documents,
together with: (a) all interest accrued thereon; (b) all reasonable costs,
expenses, and attorneys' fees of counsel to Administrative Agent and Lenders (as
a group) and of counsel to any Lender incurred in the documentation of the Loan
Documents and any
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 13
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amendments, waivers or extensions thereof, or administration, enforcement or
collection thereof (specifically including, without limitation, any of the
foregoing incurred in connection with any bankruptcy or other insolvency
proceedings of Borrower or any Guarantor); (c) the reimbursement and payment of
all sums which might be advanced by Administrative Agent or any Lender to pay or
satisfy amounts required to be paid by Borrower or any Guarantor under this
Agreement or under any other instrument, agreement or document at any time
executed in connection with or as security for any part of the Credit Facility
(including the Letters of Credit); (d) all costs, charges, reasonable attorneys'
fees and expenses owing and to become owing in connection with the
documentation, administration, enforcement and collection of the foregoing
obligations and indebtedness; and (e) all obligations of Borrower to any Lender
pursuant to any Interest Hedge Agreement, including without limitation, under
any Short Term Debt entered into by and among Borrower and any Lender;
regardless of whether such indebtedness, obligations and liabilities are direct,
indirect, fixed, contingent, liquidated, unliquidated, joint, several or joint
and several. The aggregate amount of costs and expenses of all Lenders (other
than Administrative Agent) incurred prior to the occurrence of and continuance
of a Default or Event of Default including, without limitation, attorneys' fees
of such Lenders, related to the Credit Facility and included in Obligations
shall not exceed $20,000.00. The Obligations shall include all renewals,
extensions, modifications, rearrangements and replacements of any of the
above-described obligations and indebtedness.
Operating Lease means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13
dated November, 1976, or otherwise in accordance with GAAP.
Original Loan Agreement has the meaning set forth on the first page of
this Agreement.
Parent Companies means Monarch Dental Management, Inc., formerly known
as Oral Health Concepts, Inc., a Texas corporation, and Partners Dental
Corporation, a Delaware corporation.
Pension Plan means any Employee Plan that is now or was previously
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code.
PBGC mean the Pension Benefit Guaranty Corporation, or its successors.
Permitted Acquisition means any Acquisition of a dental practice or
other dental practice management company which either (a) has a Total
Acquisition Price of less than $5,000,000.00 or (b) is not financed in whole or
in part with proceeds of the Credit Facility.
Permitted Encumbrances means with respect to any asset (a) minor
defects in title which do not secure the payment of money and otherwise have no
material adverse effect on the value or operation of any material asset
encumbered thereby, including, without limitation, easements, rights-of-way,
servitudes, permits, surface leases, restrictions and other similar charges,
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 14
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encumbrances or title defects, (b) mechanic's, materialman's, warehouseman's,
journeyman's, carrier's, and other similar liens arising by operation of law in
the ordinary course of business, securing obligations which are not delinquent,
(c) liens for taxes, assessments or other governmental charges not delinquent,
(d) liens (other than any lien imposed by ERISA) incurred or deposits made in
the ordinary course of business to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than capital leases), performance bonds, purchase,
construction or sales contracts and other similar obligations, in each case not
incurred or made in connection with the borrowing of money, the obtaining of
advances on credit or the payment of the deferred purchase price of property,
(e) any attachment or judgment lien, unless the judgment it secures shall not,
within thirty (30) days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within thirty (30) days after the expiration of any such stay, and (f) liens
existing on the Closing Date and disclosed to Lenders.
Permitted Institutional Debt means Permitted Senior Institutional Debt
and Permitted Subordinate Institutional Debt.
Permitted Investments means (a) cash and obligations issued or
guaranteed by the United States of America, (b) obligations issued or guaranteed
by any Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America pursuant to authority granted by
the Congress of the United States, (c) certificates of deposit issued, or
banker's acceptances drawn on and accepted by, or money market accounts or time
deposits in, commercial banks which are members of the Federal Deposit Insurance
Corporation and which have a combined capital, surplus and undistributed profits
of at least $50,000,000, (d) repurchase agreements with any such commercial
bank, or with broker-dealers or other institutions, that are secured by
obligations issued or guaranteed by the United States of America or an agency or
instrumentality thereof, (e) other money market instruments, and mutual funds
substantially all of the assets of which are invested in any or all of the
investments described in clauses (a) through (d) above, and (f) commercial paper
rated P-1 by Xxxxx'x Investors Service, Inc. or A-1 by Standard & Poor's
Corporation on the date of acquisition.
Permitted Senior Institutional Debt means Institutional Debt which is
(i) not Permitted Subordinate Institutional Debt, (ii) subject to an
intercreditor agreement between the Lenders and the holder of such Debt, or
which is otherwise subject to terms and conditions which satisfy the
requirements of an intercreditor agreement, which intercreditor agreement or
terms and conditions shall be acceptable to Required Lenders in their sole
discretion, and (iii) otherwise satisfies the limitations imposed by Section
7.6.
Permitted Subordinate Institutional Debt means unsecured Institutional
Debt which is (i) by its terms expressly subordinate in all respects to the
Credit Facility (including any Short Term Debt and the Swingline Advances), in
form and substance acceptable to Required Lenders in their sole discretion and
(ii) otherwise satisfies the limitations imposed by Section 7.6.
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 15
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Person means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
Personal Property means all Accounts and all Chattel Paper, Contracts
(including, without limitation, the Management Services Agreements and the
Succession Agreements), Equipment, General Intangibles, Instruments and
Inventory (as each of those terms is defined in the Security Agreement) and any
and all other personal property, together with all proceeds, replacements,
products or substitutions of any of the above.
Plan Asset Regulation means a regulation promulgated by the Department
of Labor at 29 C.F.R. Section 25110.3-101, as amended from time to time.
Pledge Agreement shall mean that certain Stock Pledge Agreement (as
amended) executed by Borrower covering all of the issued and outstanding stock
of Borrower's Subsidiaries, such Pledge Agreement to be in form acceptable to
Administrative Agent.
Professional Corporation means, collectively, Modern Dental
Professionals, P.C., a Texas professional corporation, f/k/a Xxxxxx X. Xxxxxxx,
D.D.S., P.C., Modern Dental Professionals - Xxxxxxxxxxxx, P.C., an Arkansas
professional corporation, and Modern Dental Professionals - Indiana, P.C., an
Indiana professional corporation.
Provider means any person who performs any of the following services
with respect to a dental practice that is owned or managed by Borrower or any
Guarantor:
(a) Any dentist or dental surgeon;
(b) Any person who shall offer or undertake by any means or
methods whatsoever, to clean teeth or to remove stains, concretions or deposits
from teeth in the human mouth, or who shall undertake or offer to diagnose,
treat, operate, or prescribe by any means or methods for any disease, pain,
injury, deficiency, deformity, or physical condition of the human teeth, oral
cavity, alveolar process, gums, or jaws;
(c) Any person who shall offer or undertake in any manner to
prescribe or make, or cause to be made, an impression of any portion of the
human mouth, teeth, gums, or jaws, for the purpose of diagnosing, prescribing,
treating, or aiding in the diagnosing, prescribing or treating, any physical
condition of the human mouth, teeth, gums or jaws, or for the purpose of
constructing or aiding in the construction of any dental appliance, denture,
dental bridge, false teeth, dental plate or plates of false teeth, or any other
substitute for human teeth;
(d) Any person who shall offer or undertake to fit, adjust,
repair, or substitute in the human mouth or directly related and adjacent
masticatory structures any dental appliance, structure, prosthesis, or denture,
or who shall aid or cause to be fitted, adjusted, repaired, or
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 16
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substituted in the human mouth or directly related and adjacent masticatory
structures any dental appliance, structure, prosthesis, or denture; and
(e) Any person who makes, fabricates, processes, constructs,
produces, reproduces, duplicates, repairs, relines, or fixes any full or partial
denture, any fixed or removable dental bridge or appliance, any dental plate or
plates of false teeth, any artificial dental restoration, or any substitute or
corrective device or appliance for the human teeth, gums, jaws, mouth, alveolar
process, or any part thereof for another.
Rate Enhancement Spread means the applicable "Rate Enhancement Spread"
as shown on, and as determined in accordance with, Schedule II attached hereto.
The Rate Enhancement Spread is subject to reduction or increase as provided in
Schedule II.
Register has the meaning set forth in Section 10.10 hereof.
Regulation U means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time and shall include any
successor or other regulation or official interpretation of the Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks that is applicable to member banks of the
Federal Reserve System.
Regulatory Change shall mean the adoption of any applicable law, rule
or regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority charged with the administration thereof.
Request for Advance means a written request of an Authorized Borrowing
Officer for an Advance or a Letter of Credit, substantially in the form attached
hereto as Exhibit B, which shall (a) specify (i) the date of such an Advance or
Letter of Credit, which shall be a Business Day, (ii) what portion of such
Advance is to be a LIBOR Rate Advance or Variable Rate Advance, (iii) the
aggregate amount of such Advance or Letter of Credit, and (iv) the transfer
instructions with respect to such Advance; and (b) contain a certification of an
Authorized Borrowing Officer as of the date of such Advance or Letter of Credit
certifying (i) that the intended use of the proceeds of such Advance or Letter
of Credit does not violate the provisions of this Agreement (including, without
limitation, Section 2.1 and Section 5.15) or any other Loan Document, and (ii)
as to the matters set forth in Section 4.2(b) and (c), in the case of an
Advance, or the matters set forth in Section 4.4(c) and (d), in the case of a
Letter of Credit.
Required Institutional Debt has the meaning set forth in Section
8.1(k).
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 17
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Required Lenders means:
(a) Except as provided in clause (b) below or as expressly
stated otherwise in this Agreement or in any other Loan Document, at any time
and with respect to any matter hereunder or relating to the Credit Facility,
Lenders holding at the time in question a portion of the Credit Facility
(including participations in Letters of Credit and Swingline Advances) equal to
or greater than fifty-one percent (51%) of the sum of (i) the aggregate unpaid
principal amount of the Notes and any notes evidencing any Short Term Debt, plus
(ii) the Letter of Credit Exposure (or, if no Advances, Letters of Credit or
Short Term Debt are outstanding, then Lenders holding at the time in question
fifty-one percent (51%) of the aggregate Loan Commitment Amounts of all
Lenders); and
(b) With respect to (i) any alteration of the interest rate
applicable to the Credit Facility, or (ii) any alteration of the amount of any
fees payable to the Lenders under this Agreement, or (iii) any extension of the
maturity date of the Credit Facility or the due date of any installment of
principal or interest or any fees on the Credit Facility, or (iv) forgiveness of
any principal or interest under the Credit Facility, or (v) any increase in the
amount of the Credit Facility, or (vi) any change in the definition of Loan
Percentage, or (vii) the release of any Lenders' Liens on any Collateral, or
(viii) the release of the Guaranty of any Guarantor, or (ix) the reinstatement
of the Notes and other indebtedness pursuant to the provisions in Section 8.2(a)
hereof, or (x) any consent of Lenders required by Section 10.10(a) hereof, or
(xi) any alteration of the provisions of this definition of Required Lenders,
all the Lenders.
Rights means rights, remedies, powers, privileges and benefits.
SEC means the federal Securities and Exchange Commission, and its
successors.
Security Agreement means that certain Amended and Restated Security
Agreement of even date herewith, executed by Borrower and each Guarantor in
favor of Administrative Agent, securing the payment of the Notes and the payment
and performance of all the Obligations, and assigning to Administrative Agent
all of Borrower's and each Guarantor's right, title and interest in, to and
under the Personal Property, and all renewals, extensions, modifications,
supplements and replacements thereof, which Security Agreement shall be in form
acceptable to Administrative Agent.
Short Term Debt means Debt of Borrower existing on the date hereof
pursuant to those certain Swingline Notes dated ___________ to Bank of America,
N.A. and Fleet National Bank in the aggregate amount of Ten Million and No/100
Dollars ($10,000,000.00), which Short Term Debt is included in the Obligations
and secured by the Collateral, and ranks equally with the Credit Facility as set
forth in Section 9.6.
Subordinate Acquisition Debt means any Debt of Borrower and its
Subsidiaries which is (a) evidenced by a promissory note given as part of the
Total Acquisition Price, and (b)
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 18
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subordinate in all respects to the Obligations, provided, such subordination is
in form and substance satisfactory to Administrative Agent.
Subsidiary means, (a) for any Person other than Borrower, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions (including that of a general partner)
are at the time directly or indirectly owned, collectively, by such Person and
any Subsidiaries of such Person, or (b) for Borrower, any present or future
corporation or other entity at least a majority of whose outstanding voting
stock, other voting securities or other ownership interests shall at the time be
owned directly or indirectly by Borrower or any other entity of which at least a
majority of the securities or other ownership interests are at the time directly
or indirectly owned, collectively, by Borrower and any Subsidiaries of Borrower.
The term Subsidiary shall include Subsidiaries of Subsidiaries (and so on).
Succession Agreements means, all succession agreements entered into
between Borrower, any Guarantor, and any professional corporation or association
for the purpose of establishing the successors to the equity interests in any
such professional corporation or association upon the occurrence of certain
events, including, without limitation, that certain succession agreement, dated
as of February 5, 1996, by and between Xxxxxx X. Xxxxxxx, D.D.S., P.C., Xx.
Xxxxxx X. Xxxxxxx, D.D.S. and Borrower, together with all modifications,
amendments or replacements of the foregoing.
Swingline Advances means any Swingline Advance made by Swingline Lender
to Borrower pursuant to Section 2.2.
Swingline Commitment means $2,000,000.00.
Swingline Lender means Bank of America.
Swingline Note means the Swingline Note made by Borrower payable to the
order of Swingline Lender, substantially in the form as Exhibit A-2, evidencing
the Swingline Advances, and any amendments and modifications thereto, any
substitutions therefor, and any replacements, restatements, renewals or
extension thereof, in whole or in part.
Target Company EBITDA means, for any Person, with respect to any
period, determined in accordance with GAAP and as approved by Administrative
Agent, the sum of (a) such Person's net income, plus (b) Taxes (to the extent
that such amounts have been deducted in determining such Person's net income for
such period), plus (c) interest expense (to the extent that such amounts have
been deducted in determining such Person's net income for such period), plus (d)
all amounts attributable to depreciation and/or amortization of intangible and
other assets of such Person (to the extent that such amounts have been deducted
in determining such Person's net income for such period), plus (e) all
non-recurring expenditures that (i) were incurred prior to the closing of the
acquisition of such Person by Borrower or any Subsidiary of
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 19
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Borrower, and (ii) have been verified by an independent certified public
accountant or other Person approved by Administrative Agent (to the extent that
such amounts have been deducted in determining such Person's net income for such
period).
Taxes means all taxes, assessments, filing or other fees, levies,
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or other charges of any
nature whatsoever, from time to time or at any time imposed by law or any
federal, state or local governmental agency. "Tax" means any one of the
foregoing.
Telerate Screen means the display designated as Screen 3750 on the
Telerate System or such other screen on the Telerate System as shall display the
London interbank offered rates for deposits in Dollars quoted by selected banks.
Termination Date means June 30, 2001, or such earlier date on which the
Credit Facility is terminated and/or the Notes are accelerated.
Total Acquisition Price means, in connection with any Acquisition, the
sum of all cash to be paid at closing or in installments plus the value of any
stock given by Borrower or any Subsidiary of Borrower in connection with such
Acquisition which value is determined in accordance with GAAP plus any other
amounts paid or to be paid by Borrower or any Subsidiary of Borrower as part of
the purchase price in connection with such Acquisition, provided, that all such
amounts are approved by Administrative Agent plus all Debt assumed by Borrower
or any Subsidiary of Borrower in connection with such Acquisition.
UCC means the Uniform Commercial Code in effect under the laws of the
State of Texas, as amended, or, if stated with reference to another
jurisdiction, the Uniform Commercial Code as adopted in the relevant
jurisdiction.
Unused Fee shall mean the non-refundable fee equal to the product of
(a) the applicable "Unused Fee Percentage" as shown on, and as determined in
accordance with, Schedule II attached hereto, and (b) the average daily unused
portion of the Credit Facility during the calendar quarter immediately preceding
the date on which such fee is to be paid; provided that the amount of any
Swingline Advances shall be considered "unused" for purposes of the above
calculation. The percentage to be used in clause (a) shall be subject to
reduction or increase, as set forth on Schedule II.
U.S. Government Securities means (a) securities that are (i) direct
obligations of the United States of America for the full and timely payment of
which the full faith and credit of the United States of America is pledged or
(ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America, the full and timely payment
of which is unconditionally guaranteed as a full faith and credit obligation of
the United States of America, which in either case are not callable or
redeemable at the option of the issuer
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 20
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thereof or (b) any depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933) as custodian with respect to any U.S.
Government Securities specified in clause (a) or a specific payment of principal
of or interest on any U.S. Government Securities specified in clause (a) held by
such bank for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Securities or the specific payment of principal of or interest on the U.S.
Government Securities evidenced by such depository receipt.
Variable Rate means a fluctuating rate of interest equal to the sum of
(a) the Base Rate, plus (b) the Base Rate Spread, plus (c) the Rate Enhancement
Spread, plus (d) if applicable, the Additional Spread; provided, that the
Variable Rate is subject to adjustment as provided in Section 3.3 hereof.
Variable Rate Advance means an Advance which will bear interest
computed with reference to the Variable Rate.
Working Capital Advance has the meaning set forth in Section 2.1(a).
Working Capital Facility means the credit facility established under
the Original Loan Agreement for working capital purposes.
SECTION 1.2. Singular and Plural of Definitions . Each term defined in
the singular form in Section 1.1 shall mean the plural thereof when the plural
form of such term is used in this Agreement, and each term defined in the plural
form in Section 1.1 shall mean the singular thereof when the singular form of
such term is used in this Agreement.
SECTION 1.3. Substantive Definitions. The terms, provisions and
agreements set forth in the definitions contained in Section 1.1 shall be
substantive terms of this Agreement and fully binding on the parties hereto.
SECTION 1.4. Money. Unless stipulated otherwise, all references herein
or in any of the Loan Documents to "Dollars," "$," "money", "cash", "payments"
or other similar financial or monetary terms are references to lawful money of
the United States of America.
SECTION 1.5. Captions; References. The captions in this Agreement and
in the table of contents hereof are for convenience of reference only and shall
not define, affect or limit any of the terms or provisions hereof. All
references herein to Articles and Sections are, unless specified otherwise,
references to articles and sections of this Agreement. Unless specifically
indicated otherwise, all references herein to an "Exhibit," "Annex" or
"Schedule" are references to exhibits, annexes or schedules attached hereto, all
of which are incorporated herein and made a part hereof for all purposes, the
same as if set forth fully herein, it being understood that if any exhibit,
annex or schedule attached hereto which is to be executed and delivered contains
blanks,
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 21
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the same shall be completed correctly and in accordance with this Agreement
prior to or at the time of the execution and delivery thereof. The words
"herein," "hereof," "hereunder" and other similar compounds of the word "here"
when used in this Agreement shall refer to the entire Agreement and not to any
particular provision or section unless specifically indicated otherwise.
SECTION 1.6. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
ARTICLE II
COMMITMENT
SECTION 2.1. Credit Facility Commitment. Each Lender severally agrees,
subject to and upon the terms, covenants and conditions of this Agreement, to
make Advances to Borrower, or, with respect to Letters of Credit, to cause the
Issuing Lender to issue Letters of Credit for the account of Borrower, and
Borrower shall be entitled to obtain the following Advances and Letters of
Credit in the manner set forth in Section 2.2:
(a) Advances. One or more Advances for (i) the general working
capital purposes of Borrower (a "Working Capital Advance"), (ii) future
Acquisitions as approved by Lenders, if necessary, and (iii) purchase of fixed
assets; provided, that, (A) each such Advance must occur on a Business Day prior
to the Termination Date, (B) each such Advance must be in an amount not less
than the limitations provided in Section 2.2, (C) if such Advance is to be a
Working Capital Advance, the Letter of Credit Exposure plus the aggregate
outstanding balance of Working Capital Advances will not, after giving effect to
such Advance, exceed Ten Million and No/100 Dollars ($10,000,000.00), and (D) on
any date of determination, the aggregate outstanding balance of Advances
(including the Swingline Advances) plus the Letter of Credit Exposure shall
never exceed the Available Commitment. Borrower may borrow, repay and reborrow
under this Agreement. The Available Commitment under the Credit Facility shall
be in the maximum amount of Seventy-Five Million and No/100 Dollars
($75,000,000.00). Other than Swingline Advances, Borrower shall be entitled,
subject to the terms of this Agreement, to receive not more than five Advances
per month in amounts equal to or in excess of One Hundred Thousand and No/100
Dollars ($100,000.00).
(b) Letters of Credit. Letters of Credit may be issued by the
Issuing Lender for the account of Borrower for any of the purposes for which
Borrower can obtain an Advance; provided, that, (i) each such Letter of Credit
shall be issued on a Business Day occurring prior to the Termination Date, (ii)
after the issuance of any such Letter of Credit, (A) the Letter of Credit
Exposure plus the aggregate outstanding balance of Working Capital Advances
shall not exceed Ten Million and No/100 Dollars ($10,000,000.00), (B) the Letter
of Credit Exposure plus the
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 22
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outstanding balance of the Advances must be less than or equal to the Available
Commitment, and (C) the Letter of Credit Exposure shall not exceed One Million
and No/100 Dollars ($1,000,000.00), and (iii) each such Letter of Credit must
have an expiration date no later than the earlier of (i) one (1) year after the
issuance thereof or (ii) the Termination Date. To the extent that funds are ever
drawn under any of the Letters of Credit, each such draw will be paid by the
Issuing Lender, and each of the Lenders will make an Advance in the amount of
such Lender's Loan Percentage of the amount so paid by the Issuing Lender to
reimburse the Issuing Lender for such draw.
(c) Swingline Commitment. Subject to the terms and conditions
of this Agreement, Swingline Lender agrees to make Swingline Advances to
Borrower from time to time through the Termination Date; provided, that the
aggregate principal amount of all outstanding Swingline Advances (after giving
effect to any amount requested), shall not exceed the lesser of (i) the
Available Commitment less the sum of all outstanding Advances under the Credit
Facility and the Letter of Credit Exposure and (ii) the Swingline Commitment.
In no event shall any Lender be required to make any Advances in excess
of such Lender's Loan Percentage of the amount required to be advanced by the
Lenders under the above provisions of this Section 2.1 or which would cause any
Lender to have made Advances in excess of such Lender's Loan Commitment Amount.
SECTION 2.2. Method of Borrowing. Subject to the terms and conditions
of this Agreement, Borrower shall be entitled to obtain Advances and Letters of
Credit from Lenders and Swingline Advances from the Swingline Lender pursuant to
Section 2.1 in the following manner:
(a) Variable Rate Advances; Swingline Advances. In the case of
any Variable Rate Advance, Borrower, through an Authorized Borrowing Officer,
shall give Administrative Agent prior to 10:00 a.m., Dallas, Texas time, on the
date of any such proposed Advance, a Request for Advance specifying their
intention to borrow or reborrow such Variable Rate Advance hereunder. In the
case of any Swingline Advance, Borrower, through an Authorized Borrowing
Officer, shall give Administrative Agent prior to 1:00 p.m., Dallas, Texas time,
on the date of any such proposed Advance, a Request for Advance specifying their
intention to borrow or reborrow such Swingline Advance hereunder. Such Requests
for Advance shall be accompanied by the documents required to be delivered
pursuant to Article IV.
(b) LIBOR Rate Advances. In the case of LIBOR Rate Advances,
Borrower, through an Authorized Borrowing Officer, shall give Administrative
Agent at least three Business Days prior to the date of such Advance an
irrevocable Request for Advance specifying its intention to borrow or reborrow
such Advance hereunder. Notice shall be given to Administrative Agent prior to
10:00 a.m., Dallas, Texas time, in order for such Business Day to count toward
the minimum number of Business Days required. LIBOR Rate Advances shall in all
cases be subject to availability and to the provisions of Section 3.5 hereof.
For LIBOR Rate
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 23
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Advances, the Request for Advance shall specify the requested funding date,
which shall be a Business Day, the amount of the proposed LIBOR Rate Advance to
be made by Lenders, the Interest Period selected (provided that no such Interest
Period shall extend past the applicable Termination Date) and shall be
accompanied by the documents required to be delivered pursuant to Article IV.
Such LIBOR Rate Advance shall be in an amount not less than Two Million and
No/100 Dollars ($2,000,000.00) or greater whole multiples of One Hundred
Thousand and No/100 Dollars ($100,000.00).
(c) Notice To Lenders. Administrative Agent shall promptly
notify Lenders or Swingline Lender, as applicable, of each notice received from
an Authorized Borrowing Officer pursuant to this Section 2.2. Each Lender, or
Swingline Lender, as applicable, shall, not later than noon, Dallas, Texas time,
on the date of any such Advance, deliver to Administrative Agent, at its address
set forth herein, such Lender's Loan Percentage of such Advance, or in the case
of a Swingline Advance, the amount thereof, in immediately available funds in
accordance with Administrative Agent's instructions. Prior to 2:00 p.m., Dallas,
Texas time, on the date of any Advance hereunder Administrative Agent shall,
subject to satisfaction of the conditions set forth in Article IV, disburse the
amounts made available to Administrative Agent by the Lenders or Swingline
Lender, as applicable, by transferring such amounts by wire transfer or
crediting such amounts to the account of Borrower maintained with Administrative
Agent as directed by an Authorized Borrowing Officer. All Advances (other than
Swingline Advances) shall be made by each Lender according to its Loan
Percentage.
(d) Method of Issuing Letters of Credit. Not less than three
(3) Business Days prior to the requested date of issuance of any Letter of
Credit, Borrower shall deliver to Administrative Agent a Request For Advance and
shall execute and deliver to the Issuing Lender the customary letter of credit
application and agreement used by the Issuing Lender in substantially the form
of Exhibit D attached hereto (the "LOC Application"). Nothing in this Agreement
shall prohibit the Issuing Lender from modifying the form of LOC Application in
effect from time to time in connection with the issuance of any Letter of
Credit, provided that, such modification does not substantially modify this
Agreement to the detriment of Borrower. In the event of a direct conflict
between the provisions of the LOC Application and this Agreement, the provisions
of this Agreement shall govern. In no event shall a Letter of Credit have an
expiration date which is later than the earlier of (i) one year from the date of
issuance thereof or (ii) the Termination Date. Letters of Credit may be standby
letters of credit only and be issued on behalf of Borrower. Upon satisfaction of
the applicable conditions precedent set forth in Article IV, and subject to the
other terms and conditions of this Agreement, the Issuing Lender shall issue
Letters of Credit for the account of Borrower within three (3) Business Days
from receipt by the Issuing Lender of the fully-executed LOC Application (so
long as the requested terms of such Letter of Credit are acceptable to the
Issuing Lender in its reasonable discretion).
Immediately upon the issuance of each Letter of Credit, the
Issuing Lender shall be deemed to have sold and transferred to each Lender, and
each Lender shall be deemed to have purchased and received from the Issuing
Lender, in each case irrevocably and without any
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 24
25
further action by any party, an undivided interest and participation in such
Letter of Credit, each drawing thereunder and the obligations of Borrower under
this Agreement in respect thereof in an amount equal to the product of (x) such
Lender's Loan Percentage times (y) the maximum amount available to be drawn
under such Letter of Credit (assuming compliance with all conditions to
drawing). Within the limits of the Credit Facility, and subject to the limits
referred to above, Borrower may through an Authorized Borrowing Officer request
the issuance of Letters of Credit under this Section 2.2(d), repay any Advances
resulting from drawings thereunder pursuant to this Section 2.2(d) and request
the issuance of additional Letters of Credit under this Section 2.2(d).
The payment by the Issuing Lender of a draft drawn under any
Letter of Credit shall constitute for all purposes of this Agreement the making
by the Issuing Lender of an Advance, which shall bear interest at the Variable
Rate in effect under the Credit Facility, in the amount of such draft (but
without any requirement for compliance with the conditions set forth in Article
IV hereof). In the event that a drawing under any Letter of Credit is not
reimbursed by Borrower by 10:00 a.m. (Dallas time) on the first Business Day
after such drawing, the Issuing Lender shall promptly notify Administrative
Agent and each other Lender. Each such Lender shall, on the first Business Day
following such notification, make an Advance, which shall bear interest at the
Variable Rate in effect under the Credit Facility, and shall be used to repay
the applicable portion of the Issuing Lender's advance with respect to such
Letter of Credit, in an amount equal to the amount of its participation in such
drawing for application to reimburse the Issuing Lender (but without any
requirement for compliance with the applicable conditions set forth in Article
IV hereof) and shall make available to Administrative Agent for the account of
the Issuing Lender, by deposit at Administrative Agent's office, in same day
funds, the amount of such Advance. In the event that any Lender fails to make
available to Administrative Agent for the account of the Issuing Lender the
amount of such Advance, the Issuing Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at a rate per
annum equal to the lesser of (i) the Maximum Lawful Rate or (ii) the Federal
Funds Rate.
(e) Swingline Advances. Swingline Advances shall be refunded
by the Lenders on demand by Swingline Lender. Such refundings shall be made by
the Lenders in accordance with their respective Loan Percentages and shall
thereafter be reflected as Advances under the Credit Facility of the Lenders on
the books and records of the Administrative Agent, which Advances under the
Credit Facility shall be Variable Rate Advances. Each Lender shall fund its
respective Loan Percentage of Advances as required to repay Swingline Advances
outstanding to the Swingline Lender upon demand by the Swingline Lender but in
no event later than 2:00 p.m. (Dallas time) on the next succeeding Business Day
after such demand is made. No Lender's obligation to fund its respective Loan
Percentage of a Swingline Advance shall be affected by any other Lender's
failure to fund its Loan Percentage of a Swingline Advance, nor shall any
Lender's Loan Percentage be increased as a result of any such failure of any
other Lender to fund its Loan Percentage.
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Borrower shall pay to Swingline Lender on demand the amount of
any Swingline Advances to the extent amounts received from the Lenders are not
sufficient to repay in the full the outstanding Swingline Advances requested or
required to be refunded.
Each Lender acknowledges and agrees that its obligation to
refund Swingline Advances in accordance with the terms of this Section 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever (including, without limitation, repayment of such Swingline Advance
by Borrower pursuant to the above paragraph if the same is required to be
refunded to Borrower by Swingline Lender; provided, that if prior to the
refunding of any outstanding Swingline Advance pursuant to this Section 2.2, one
of the events described in Section 8.1(f) or (g) shall have occurred, each
Lender will, on the date the applicable Advance under the Credit Facility would
have been made, purchase an undivided participating interest in the Swingline
Advance to be refunded in an amount equal to its Loan Percentage of the
aggregate amount of such Swingline Advance). Each Lender will immediately
transfer to the Swingline Lender, in immediately available funds, the amount of
its participation and upon receipt thereof the Swingline Lender will deliver to
such Lender a certificate evidencing such participation dated the date of
receipt of such funds and for such amount.
SECTION 2.3. Fees.
(a) Unused Fees. In consideration for Lenders making available the
Credit Facility, Borrower agrees to pay to Administrative Agent the Unused Fee
commencing on the first day of the first calendar quarter after the Closing
Date, and continuing on the first day of each calendar quarter thereafter until
the Termination Date and on the Termination Date. The Unused Fee is to be
computed based on the number of actual days elapsed, assuming each calendar year
consisted of 360 days, subject, however, to proportionate adjustments because
the Closing Date is not the beginning or end of a calendar quarter, the
Termination Date is not at the beginning or end of a calendar quarter, and if
there is an increase or decrease in the Credit Facility during such calendar
quarter. The Unused Fee is to be paid by Administrative Agent to each Lender in
accordance with its Loan Percentage.
(b) Letter of Credit Fees. Borrower shall pay to Administrative Agent a
letter of credit fee (the "Letter of Credit Fee") as a condition to the issuance
of any Letter of Credit in an amount equal to the "Letter of Credit Fee
Percentage" as shown on, and as determined in accordance with, Schedule II
attached hereto times the amount of the Letter of Credit so issued. The fee
payable in respect of the Letters of Credit shall be subject to reduction or
increase, as set forth on Schedule II. Subject to Section 10.8 hereof, such fee
shall be computed on the basis of the actual number of days elapsed. The Letter
of Credit Fee is to be paid to each Lender in accordance with its Loan
Percentage and shall be payable in four (4) equal installments with the first
such payment being due and payable on the date of issuance of the applicable
Letter of Credit and the remaining portions of the applicable Letter of Credit
Fee to be paid on the immediately following three interest payment dates under
the Credit Facility; provided, that, any Letter of Credit Fee remaining unpaid
on the Termination Date shall be paid on such date.
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 26
27
(c) Administrative and Agency Fee. In consideration of Administrative
Agent's administration services under the Credit Facility, Borrower agrees to
pay Administrative Agent (i) the Administrative Fee in advance, commencing on
the Closing Date and continuing on each anniversary of the Closing Date, until
such time as the Notes are paid in full, all Letters of Credit have been
terminated, and Lenders' commitment to make Advances under this Agreement have
been terminated and (ii) an Agency Fee in the amount of $5,000 for each new
lender added to the Credit Facility as a Lender, concurrently with the addition
of such Lender.
(d) Amendment Fee. Borrower shall pay to Administrative Agent, in
addition to such other fees and charges which Lenders may require, a fee of Five
Thousand and No/100 Dollars ($5,000.00) for each amendment to this Agreement
entered into by Administrative Agent, Lenders and Borrower after the date
hereof, but prior to the occurrence of an Event of Default which has not been
waived; provided, that no such fee shall be required in connection with any
amendment to this Agreement entered into solely for the purpose of adding any
Person as a Lender hereunder; provided further that nothing herein shall
restrict Administrative Agent or Lenders from requiring payment of an additional
facility fee or other fees in connection with any increase in the amount of the
Credit Facility or other amendments hereto. Such amendment fee shall be
distributed by Administrative Agent to each Lender in accordance with such
Lender's Loan Percentage.
(e) Syndication Expenses. Borrower shall not be liable for the costs
and expenses incurred by Lenders other than Administrative Agent related to the
purchase by any Lender after the Closing Date of an interest in the Loan, in
excess of an aggregate amount of such costs and expenses equal to $10,000.00.
ARTICLE III
TERMS OF CREDIT FACILITY
SECTION 3.1. Notes. The Credit Facility shall be evidenced by the
Notes. Each Lender shall receive an originally executed Note in an amount equal
to such Lender's Loan Commitment Amount. The Swingline Lender shall receive the
originally executed Swingline Note in an amount equal to the Swingline
Commitment.
SECTION 3.2. Maturity. All outstanding principal of the Notes, together
with all accrued but unpaid interest and other amounts owed with respect
thereto, shall be due and payable in full on the Termination Date.
SECTION 3.3. Interest Rate. Interest on the Advances shall accrue at a
rate per annum equal to the lesser of (a) at Borrower's option, the applicable
Variable Rate or the applicable Adjusted LIBOR Rate, subject, however, to the
provisions of Section 10.8 (the "Applicable Rate"), or (b) the Maximum Lawful
Rate; provided, however, if at any time the Applicable Rate
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 27
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exceeds the Maximum Lawful Rate, resulting in the charging of interest hereunder
to be limited to the Maximum Lawful Rate, then any subsequent reduction in the
Applicable Rate shall not reduce the rate of interest below the Maximum Lawful
Rate until the total amount of interest accrued on the indebtedness evidenced
hereby equals the amount of interest which would have accrued on such
indebtedness if the Applicable Rate had at all times been in effect.
Without notice to Borrower or anyone else, the Variable Rate and the
Maximum Lawful Rate shall each automatically fluctuate upward and downward as
and in the amount by which the Base Rate and Maximum Lawful Rate, respectively,
fluctuate, subject always to limitations contained in this Agreement. In
addition, without notice to Borrower or anyone else, the Variable Rate and the
Adjusted LIBOR Rate initially provided for under this Agreement shall fluctuate
upward or downward from time to time based on changes in (i) the Consolidated
Funded Debt to Consolidated EBITDA ratio and (ii) the Hypothetical Fixed Charge
Coverage Ratio, in each instance, pursuant to Schedule II. Such changes shall
occur on the first day of the calendar month following the month in which
Administrative Agent receives the quarterly financial statements and related
officer's certificate required to be delivered by Borrower pursuant to Sections
6.1 (b) and (d) hereof showing that such adjustment is appropriate (except that
with respect to any Adjusted LIBOR Rate then in effect, such change shall occur
at the end of the applicable Interest Period).
SECTION 3.4. Mandatory Interest and Principal Payments.
(a) Interest on the Notes, computed as provided in Section
3.11, shall be due and payable in arrears on the last day of each March, June,
September, and December, commencing on December 31, 1997, and on demand after
the Termination Date, so long as any principal of any Note remains unpaid. In
addition, interest accrued and unpaid on each LIBOR Rate Advance shall be due
and payable on the last day of the applicable Interest Period.
(b) Upon the sale of any Subsidiary of Borrower or any
Guarantor, Borrower shall make a principal payment in an amount equal to one
hundred percent (100%) of the net proceeds from such sale as such amount is
approved by Administrative Agent for the purpose of reducing the amount
outstanding under the Credit Facility.
(c) Upon any debt or equity offering by Borrower or any
Guarantor (other than the Required Institutional Debt), Borrower shall make a
principal payment in an amount equal to fifty percent (50%) of the net proceeds
to Borrower or such Guarantor from such offering as such amount is approved by
Administrative Agent for the purpose of reducing the amount outstanding under
the Credit Facility.
(d) Upon the closing of the Required Institutional Debt,
Borrower shall make a principal payment in an amount equal to one hundred
percent (100%) of the net proceeds (i.e. gross proceeds less usual and customary
closing costs and expenses as reasonably approved by
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 28
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Administrative Agent) to Borrower from such offering for the purpose of (i)
fully repaying any Short Term Debt and (ii) reducing the balance of the Credit
Facility.
SECTION 3.5. LIBOR Rate Advances.
(a) Upon at least three (3) Business Days' prior written
notice to Administrative Agent ("Minimum Notice Requirement"), Borrower may
through an Authorized Borrowing Officer, on any Interest Adjustment Date (other
than the Termination Date), convert amounts of any LIBOR Rate Advance into a
Variable Rate Advance with interest accruing thereon, with reference to the
applicable Variable Rate, as provided in Section 3.3 above.
(b) Upon satisfaction by Borrower of the Minimum Notice
Requirement, and subject to the conditions provided in this Agreement or the
Notes, Borrower may through an Authorized Borrowing Officer, on any date prior
to the Termination Date, convert amounts of not less than Two Million and No/100
Dollars ($2,000,000.00) in the aggregate on the same date (or any whole multiple
of One Hundred Thousand and No/100 Dollars ($100,000.00) in excess thereof) of
any Variable Rate Advances into a LIBOR Rate Advance with interest accruing
thereon with reference to the applicable Adjusted LIBOR Rate as provided in
Section 3.3 above, for the Interest Period selected in such notice.
(c) To the extent Borrower has not made an effective election
under and in accordance with subparagraphs (a) or (b) above (including, without
limitation, at the expiration of an Interest Period), the Applicable Rate shall
be the rate specified pursuant to the provisions contained herein for Variable
Rate Advances. If Borrower has failed to make such election at the end of an
Interest Period, the Lenders shall be deemed to have made a Variable Rate
Advance in the amount, and in replacement, of the LIBOR Rate Advance then
maturing.
Each notice of a LIBOR Rate election by Borrower must be given by an
Authorized Borrowing Officer, must satisfy the Minimum Notice Requirement and
shall include the following: (i) Borrower's election of the applicable Adjusted
LIBOR Rate; (ii) Borrower's choice of an Interest Period during which the
Adjusted LIBOR Rate will apply; (iii) Borrower's election of the effective date
(the "Effective Date") on which the LIBOR Rate Advance shall be made; and (iv)
the amount of outstanding loan principal which for any LIBOR Rate Advance shall
not be less than Two Million and No/100 Dollars ($2,000,000.00) (or any whole
multiple of One Hundred Thousand and No/100 Dollars ($100,000.00) in excess
thereof), to which the Adjusted LIBOR Rate shall apply. Borrower shall give
notice of such election to Administrative Agent on behalf of Lenders.
Borrower's election to convert to the Adjusted LIBOR Rate is subject to
the following conditions: (1) the Interest Period shall be limited to a period
commencing on the Effective Date and ending on a date 30, 90 or 180 days later
elected by Borrower in their notice to Administrative Agent; (2) Borrower's
written notice of an election shall be received by Administrative Agent in time
to satisfy the Minimum Notice Requirement; (3) the last day of the
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 29
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Interest Period will not be subsequent in time to the Termination Date; (4) in
the case of a continuation of a LIBOR Rate Advance, the Interest Period
applicable after such continuation shall commence on the last day of the
preceding Interest Period; (5) no LIBOR Rate election shall be made if
Administrative Agent notifies Borrower that it has determined by reason of
circumstances affecting the interbank Eurodollar market that either adequate or
reasonable means do not exist for ascertaining the Adjusted LIBOR Rate for any
Interest Period, or it becomes impracticable for Administrative Agent to obtain
funds by purchasing U.S. dollars in the interbank Eurodollar market, or if
Administrative Agent or any Lender determines that the Adjusted LIBOR Rate will
not adequately or fairly reflect the costs to any Lender of maintaining the
applicable LIBOR Rate Advances at such rate, or if as a result of any Regulatory
Change, it shall become unlawful or impossible for Lenders to maintain any such
LIBOR Rate election; (6) there shall never be more than four (4) LIBOR Rate
Advances, in the aggregate, in effect at any one time hereunder; and (7) no
LIBOR Rate election shall be made after the occurrence and during the
continuance of an Event of Default.
If, on or after the Effective Date, any Regulatory Change shall make it
unlawful or impossible for any Lender (or its Eurodollar lending office) to
make, maintain or fund LIBOR Rate Advances and such Lender shall so notify
Administrative Agent, Administrative Agent shall forthwith give notice thereof
to the other Lenders and Borrower, whereupon until such Lender notifies Borrower
and Administrative Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Lender to make LIBOR Rate Advances shall
be suspended. If such Lender shall determine that it may not lawfully continue
to maintain and fund any of its outstanding LIBOR Rate Advances to maturity and
shall so specify in such notice, Borrower shall immediately prepay in full the
then outstanding principal amount of such Lender's portion of the LIBOR Rate
Advances, together with accrued interest thereon. Concurrently with prepaying
such portion of the LIBOR Rate Advances, Borrower shall borrow a Variable Rate
Advance in an equal principal amount from such Lender (on which interest and
principal shall be payable contemporaneously with the related LIBOR Rate
Advances of the other Lenders), and such Lender shall make such Variable Rate
Advance. If a Lender shall be unable to make, maintain or fund LIBOR Rate
Advances as above provided for more than sixty days, and the other Lenders are
not similarly restricted, Borrower shall be entitled to designate an Eligible
Assignee reasonably acceptable to Administrative Agent to purchase the interest
of the Lender which is unable to fund LIBOR Rate Advances, and such Lender shall
sell its interest to such Eligible Assignee within ten Business Days of
Borrower's request.
Borrower shall indemnify Administrative Agent and Lenders against any
loss or expense which Administrative Agent or Lenders may, as a consequence of
Borrower's failure to make a payment on the date such payment is due hereunder
or the payment, prepayment or conversion of any LIBOR Rate Advances hereunder on
a day other than an Interest Adjustment Date, sustain or incur in liquidating or
employing deposits from third parties acquired to effect, fund or maintain any
such LIBOR Rate Advances or any part thereof, including, without limitation, any
Consequential Loss.
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 30
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Borrower shall also indemnify Lenders against and reimburse Lenders for
increased costs to Lenders, as a result of any Regulatory Change, in the
maintaining of any LIBOR Rate Advances; provided that Administrative Agent shall
give Borrower written notice of such costs within one hundred eighty (180) days
of its or any Lender's implementation and/or compliance with any such Regulatory
Change and such costs shall be reimbursed to such Lender prior to the earlier of
(i) the Termination Date or (ii) ten (10) days following written notice thereof
from Administrative Agent to Borrower. All payments made pursuant to this
paragraph shall be made free and clear, without reduction for, or account of,
any present or future taxes or other levies of any nature, excluding net income
and franchise taxes.
SECTION 3.6. Payments of Advances; Reduction of Commitment Amount.
(a) At any time, Borrower may by notice to Administrative
Agent prior to 10:00 a.m. (Dallas, Texas time) at least three Business Days
prior to the date on which prepayment under this Section 3.6 is to be made (such
notice to be promptly given by Administrative Agent to Lenders), voluntarily
prepay outstanding Advances from time to time and at any time, in whole or in
part; provided, that (i) each such partial payment must be in a minimum amount
of at least Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), and
(ii) Borrower shall pay any related Consequential Losses within ten days after
Administrative Agent's demand therefor. Each such optional prepayment shall be
applied ratably in accordance with Section 3.9 to pay the amounts owed to each
Lender under the Credit Facility.
(b) If the outstanding principal balance of the Credit
Facility (including the Swingline Advances) plus the Letter of Credit Exposure
ever exceeds the Available Commitment, Borrower shall make a mandatory
prepayment on the principal amount of the Credit Facility in at least the amount
of such excess together with any Consequential Loss arising as a result thereof.
If the outstanding principal balance of all Working Capital Advances (including
the Swingline Advances) plus the Letter of Credit Exposure ever exceeds
$10,000,000.00, Borrower shall make a mandatory prepayment on the principal
amount of the Credit Facility in at least the amount of such excess together
with any Consequential Loss arising as a result thereof.
(c) Borrower may terminate the Available Commitment at any
time prior to the Termination Date, provided, that (i) notice of such
termination must be received by Administrative Agent by 10:00 a.m. Dallas,
Texas, time on the first Business Day preceding the effective date of such
termination (such notice to be promptly given by Administrative Agent to
Lenders), (ii) Borrower shall not be entitled to terminate the Available
Commitment while any Letters of Credit are outstanding and (iii) in no event
shall Borrower be entitled to reduce the Available Commitment, unless Borrower
has elected to terminate the Available Commitment in full.
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 31
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(d) If Borrower shall prepay any LIBOR Rate Advance prior to
the expiration of its applicable Interest Period, a prepayment fee shall be due
to Lenders in an amount equal to the consequential loss (the "Consequential
Loss") incurred by Lenders as a result of any such prepayment, such
Consequential Loss to be an amount equal to any losses, costs or expenses
incurred by any Lender by virtue of such prepayment, which such loss, cost or
expense shall include that which any Lender may sustain or incur in liquidating
or employing deposits from any Lender or third parties acquired to effect, fund
or maintain any such LIBOR Rate Advance. Such loss or expense shall include,
without limitation, (i) any expense or penalty incurred by any Lender in
redepositing such principal amount, plus (ii) any "breakage" fees that any
Lender is required to pay by reason of the early breakage of any customary LIBOR
contract entered into by any Lender in connection with providing funds for such
LIBOR Rate Advance. Any prepayment fee required to be paid by Borrower pursuant
to this Section 3.6 or any other provisions of this Agreement or of the other
Loan Documents in connection with the prepayment of any LIBOR Rate Advances
shall be due and payable whether such prepayment is being made voluntarily or
involuntarily, including, without limitation, as a result of an acceleration of
sums due under LIBOR Rate Advances or any part thereof due to an Event of
Default.
SECTION 3.7. Schedules on Notes. Each Lender is hereby authorized to
record the date and amount of the initial principal balance of its Notes and the
date and amount of each Advance and repayment of principal on such Notes, and to
attach any such recording as a schedule to the Notes whereupon such schedule
shall constitute a part of such Notes for all purposes. Any such recording
shall, in the absence of manifest error, constitute prima facie evidence of the
accuracy of the information so recorded; provided that the absence or inaccuracy
of any such schedule or notation thereon shall not limit or otherwise affect the
liability of Borrower for the repayment of all amounts outstanding under the
Notes together with interest thereon.
SECTION 3.8. General Provisions as to Payments. Borrower shall make
each payment of principal and interest on the Credit Facility and all fees
payable hereunder or under any other Loan Document not later than 12:00 noon
(Dallas time) on the date when due, in Federal or other funds immediately
available in Dallas, Texas, to Administrative Agent at Administrative Agent's
address for payments set forth in Schedule I. Administrative Agent will promptly
(and if such payment is received by Administrative Agent by 12:00 noon (Dallas,
Texas time), and otherwise if reasonably possible, on the same Business Day, and
in any event not later than the next Business Day after receipt of such payment)
distribute to each Lender a payment on the applicable Note, such Lender's pro
rata share of each such payment received by Administrative Agent for the account
of Lenders. For purposes of calculating accrued interest on the Credit Facility,
any payment received by Administrative Agent as aforesaid by 12:00 noon (Dallas,
Texas time) on any Business Day shall be deemed made on such day; otherwise,
such payment shall be deemed made on the next Business Day after receipt by
Administrative Agent. Whenever any payment of principal or interest on the
Credit Facility, or any fees under the Loan Documents, shall be due on a day
which is not a Business Day, the date for payment thereof shall be extended to
the next succeeding Business Day. If the date for any payment of principal is
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 32
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extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.
SECTION 3.9. Application of Payments. All payments made on the Credit
Facility or the exercise of any right of setoff hereunder shall be paid (i)
first to Swingline Lender in repayment of Swingline Advances and (ii) second,
ratably to each Lender in accordance with its Loan Percentage, subject to the
provisions of Article IX and any provision in the Loan Documents or agreements
among the Lenders providing for the application of such proceeds against
expenses or other amounts. Except as (a) to principal payments made pursuant to
Section 3.6, and (b) otherwise specifically provided in this Agreement or in any
Loan Document, all prepayments on the Credit Facility shall be applied against
accrued but unpaid interest and then against the principal portion of the Credit
Facility in the inverse order of maturity; provided, however, that, unless
otherwise designated by Borrower or required by law, prepayments and involuntary
payments received by Administrative Agent and applied to principal hereunder
shall be applied first to the Variable Rate Advances (or that portion of LIBOR
Rate Advances not subject to payment of Consequential Loss) and then to reduce
LIBOR Rate Advances.
SECTION 3.10. Post-Default Interest; Past Due Principal and Interest.
After maturity of the Notes or the occurrence of an Event of Default, the
outstanding principal balance of the Notes shall, at the option of the Required
Lenders, bear interest at the Default Rate. Any past due principal of and, to
the extent permitted by Law, past due interest on the Notes shall bear interest,
payable as it accrues on demand, for each day until paid at the Default Rate.
Such interest shall continue to accrue at the Default Rate notwithstanding the
entry of a judgment with respect to any of the Obligations, except as otherwise
provided by applicable Law.
SECTION 3.11. Computation of Interest and Fees. All interest payable
on the Notes hereunder or the amount of any fees hereunder shall be computed
based on the number of days elapsed and 360-days per year, subject to the
provisions hereof limiting interest to the Maximum Lawful Rate.
SECTION 3.12. Capital Adequacy. If any present or future Law,
governmental rule, regulation, policy, guideline or directive in effect in the
United States (whether or not having the force of law) or the interpretation
thereof by a court or governmental authority with appropriate jurisdiction
affects the amount of capital required or expected to be maintained by any
Lender or any corporation controlling such Lender and such Lender reasonably
determines that the amount of capital so required or expected to be maintained
is increased by or based upon the existence of the Credit Facility or the
Letters of Credit, then such Lender may notify Borrower of such fact, and
Borrower shall pay to such Lender or Administrative Agent (for the benefit of
such Lender) from time to time on demand, as an additional fee payable
hereunder, such amount as such Lender shall determine in good faith and certify
in a notice to Borrower in reasonable detail to be an amount that will
adequately compensate such Lender in light of these circumstances for its
increased costs of maintaining such capital. Each Lender shall allocate such
cost increases among its customers in good faith and on an equitable basis. If a
Lender requires the payment of
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an additional fee under this Section 3.12 and the other Lenders do not request
such payment, Borrower shall be permitted to designate an Eligible Assignee
reasonably acceptable to Administrative Agent to purchase the interest of the
Lender requiring payment of such fee.
SECTION 3.13. Deposit of Cash Collateral. Upon the occurrence of any
Event of Default, Borrower shall, on the next succeeding Business Day, deposit
in a segregated, interest bearing account with Administrative Agent such funds
as Administrative Agent may request, up to a maximum amount equal to the
aggregate existing Letter of Credit Exposure. Any funds so deposited shall be
held by Administrative Agent as security for the Credit Facility (including the
Letters of Credit) and Borrower will, in connection therewith, execute and
deliver such assignments and security agreements in form and substance
satisfactory to Administrative Agent which Administrative Agent may, in its
discretion, require. As drafts or demands for payment are presented under any
Letter of Credit, Borrower hereby irrevocably directs Administrative Agent to
apply such funds to satisfy such drafts or demands. When all Letters of Credit
have expired and the Notes have been repaid in full (and Lenders have no
obligation to make further Advances or issue Letters of Credit hereunder) or
such Event of Default has been cured to the satisfaction of Administrative
Agent, Administrative Agent shall release to Borrower any remaining funds
deposited under this Section 3.13. Whenever Borrower is required to make
deposits under this Section 3.13 and fails to do so on the day such deposit is
due, Lenders may make such deposit using any funds of Borrower then available to
any Lender.
SECTION 3.14. Guarantees and Collateral. The Obligations shall be
unconditionally guaranteed by each Subsidiary of Borrower pursuant to guaranty
agreements satisfactory to Administrative Agent and Lenders in all respects. In
addition to such other Loan Documents which Administrative Agent may require to
create a first and prior lien and security interest in the Collateral, the
Obligations shall be secured by (a) a first and prior security interest in all
of Borrower's and each Guarantor's Personal Property pursuant to the terms of
the Security Agreement and such other documents or agreements required by
Administrative Agent, (b) a first and prior collateral assignment by the Parent
Companies of all of the partnership interests in Monarch Dental and MacGregor
Dental pursuant to the terms of the Collateral Assignment of Partnership
Interests and such other documents or agreements required by Administrative
Agent, and (c) a first and prior security interest in all of the shares of stock
of the Subsidiaries of Borrower pursuant to the terms of the Pledge Agreement
and such other documents or agreements required by Administrative Agent.
ARTICLE IV
CONDITIONS TO FUNDING
SECTION 4.1. Conditions To Initial Advance or Letter of Credit. The
obligation of Lenders to fund the initial Advance or the Issuing Lender to issue
any Letter of Credit, whichever is first, as provided herein is subject to the
satisfaction of the following conditions and requirements:
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(a) receipt by Administrative Agent of (i) this Agreement,
properly executed by Borrower, and (ii) evidence acceptable to Administrative
Agent that Borrower has paid all fees and expenses required to be paid by
Borrower as of the date of such Advance or issuance;
(b) receipt by each Lender of its Note, properly executed by
Borrower;
(c) receipt by Administrative Agent of an opinion of counsel
for Borrower and Guarantors, opining as to the due organization and existence of
Borrower and Guarantors, the enforceability of each of the Loan Documents,
compliance by Borrower and Guarantors with the Dental Practices Laws, the Fraud
and Abuse Laws, and such other applicable Laws as Lenders may require, and such
other matters as Administrative Agent may reasonably request, in form and
substance satisfactory to Administrative Agent;
(d) receipt by Administrative Agent of all resolutions,
certificates or documents it may reasonably request relating to the formation,
existence and good standing of Borrower and each Guarantor, on the date hereof,
partnership and corporate authority for the execution and validity of this
Agreement and the other Loan Documents from, as applicable, Borrower and each
Guarantor, and any other matters relevant to this Agreement, all in form and
substance satisfactory to Administrative Agent, which resolutions, certificates
and documents shall include, without limitation, (i) the limited partnership
agreements and certificates of limited partnership for Monarch and MacGregor,
(ii) the articles of incorporation and bylaws of each Guarantor, each
Professional Corporation and Borrower, (iii) certificates of the partners of
Monarch and MacGregor and resolutions of the board of directors of each
Guarantor and Borrower authorizing the execution of the Loan Documents on behalf
of such Person, (iv) certificates of incumbency for the officers of Borrower and
each Guarantor, and (v) certificates of existence and good standing issued by
the state of organization of Borrower and each Guarantor, and from the
appropriate governmental authority of each state in which any such party is
required by applicable law to be qualified;
(e) filing officer certificates (or commercial reports similar
thereto, if satisfactory to Administrative Agent) under Section 9-407(2) of the
UCC, releases or partial releases of liens or financing statements, and other
evidence satisfactory to Administrative Agent that there are no Liens on any
assets of Borrower or Guarantors, except Permitted Encumbrances and those
identified in Section 7.8;
(f) satisfaction of all conditions contained in Sections 4.2
and 4.3 if an Advance is being made, or satisfaction of all conditions contained
in Section 4.4 if a Letter of Credit is being issued; and
(g) all other documents, instruments, certificates and
information to be delivered on or before the Closing Date pursuant to the terms
of this Agreement.
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All the documents, instruments, certificates, information, evidences and
opinions referred to in this Section 4.1 shall be delivered to Administrative
Agent (unless Administrative Agent has waived delivery) no later than the
Closing Date, and Lenders shall not be bound by or obligated hereunder until
Administrative Agent has received all such items.
SECTION 4.2. Conditions To All Advances. The obligation of Lenders to
fund any Advance as provided herein is subject to the satisfaction by Borrower
of the following conditions and requirements:
(a) receipt by Administrative Agent of a Request for Advance;
(b) immediately before and after giving effect to such
Advance, no Default shall have occurred and be continuing and the making of such
Advance shall not cause a Default;
(c) the representations and warranties contained in this
Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Advance, except that all
representations and warranties that speak as of a particular date shall only be
required on the date of each such Advance to be true and correct in all material
respects as of the date to which such representation or warranty speaks and not
as of any subsequent date; and
(d) such other information and documentation as Administrative
Agent shall reasonably deem necessary in connection with the funding of such
Advance.
SECTION 4.3. Conditions To Particular Advances. In addition to the
conditions to each Advance set forth in Section 4.2, the obligation of Lenders
to fund any Advance which after giving effect to such Advance will cause the
aggregate amount of Advances outstanding under the Credit Facility to exceed
$10,000,000 is conditioned upon the receipt by Administrative Agent of evidence
that Borrower has hedged the interest rate expense for not less than
thirty-three percent (33%) of the amount outstanding under the Credit Facility
pursuant to an Interest Hedge Agreement acceptable to Administrative Agent;
provided, that, after Borrower has delivered to Administrative Agent the initial
Interest Hedge Agreement required by this Section, Borrower shall only be
required to enter into a new Interest Hedge Agreement at such time as the
difference between (a) the amount outstanding after giving effect to the then
current Request for Advance, less (b) the amount outstanding at the time
Borrower entered into the current Interest Hedge Agreement, is equal to or in
excess of $3,000,000.00.
SECTION 4.4. Conditions to Letters of Credit. The obligation of the
Issuing Lender to issue any Letter of Credit as provided herein is subject to
the satisfaction by Borrower of the following conditions and requirements:
(a) timely receipt by the Issuing Lender of a fully completed
LOC Application;
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(b) timely receipt by Administrative Agent of a Request for
Advance;
(c) immediately before and after the issuance of such Letter
of Credit, no Default shall have occurred and be continuing and the issuance of
any Letter of Credit shall not cause a Default;
(d) the representations and warranties contained in this
Agreement and in the other Loan Documents shall be true in all material respects
on and as of the date of issuance of such Letter of Credit, except that all
representations and warranties that speak as of a particular date shall only be
required on the date of issuance of each such Letter of Credit to be true and
correct in all material respects as of the date to which such representation or
warranty speaks and not as of any subsequent date;
(e) timely receipt by Administrative Agent (on behalf of
Lenders) of the Letter of Credit Fee and (on behalf of the Issuing Lender) of
the usual and customary administrative fees charged by the Issuing Lender for
the issuance of letters of credit; and
(f) such other information and documentation as Administrative
Agent or the Issuing Lender shall reasonably deem necessary in connection with
the issuance of such Letter of Credit.
SECTION 4.5. Conditions To Advances for Permitted Acquisitions. The
obligation of Lenders to fund any Advance for Permitted Acquisitions as provided
herein is subject to the satisfaction by Borrower of the following conditions
and requirements:
(a) receipt by Administrative Agent of audited financial
statements of the entity or entities to be acquired or holding the assets which
are to be acquired (collectively, the "Target") not more than one hundred twenty
(120) days after the date of such Advance, provided, that if Borrower is subject
to the rules and regulations of the Securities and Exchange Commission, and such
rules and regulations would not require Borrower to obtain audited financial
statements, then Borrower shall be required to obtain and deliver to
Administrative Agent information as shall be required by Administrative Agent;
(b) performance of due diligence review acceptable to Lenders
of the Target's books, records, contracts, preferred/common stock agreements,
employment contracts, any regulatory filings and the applicable stock or asset
purchase agreements;
(c) receipt by Administrative Agent of all information
required by Lenders in connection with subparagraph (b) above not less than ten
(10) Business Days prior to the funding of such Advance;
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(d) receipt by Administrative Agent of evidence satisfactory
to Administrative Agent of pro forma compliance with Sections 7.1 through 7.5
certified by an Authorized Officer of Borrower (Target Company EBITDA shall be
verified by an independent certified public accountant or other Person, as
approved by Lender, if the Total Acquisition Price exceeds $10,000,000.00);
(e) immediately before and after giving effect to such
Advance, no Default shall have occurred and be continuing and the making of such
Advance shall not cause a Default;
(f) satisfaction of all conditions contained in Sections 4.2
and 4.3 if an Advance is being made, or satisfaction of all conditions contained
in Section 4.4 if a Letter of Credit is being issued;
(g) on the date of such Permitted Acquisition, receipt by
Administrative Agent of a guaranty agreement satisfactory to Administrative
Agent in all respects, executed by each new Subsidiary of Borrower evidencing an
unconditional guaranty of payment of the Obligations;
(h) on the date of such Permitted Acquisition, receipt by
Administrative Agent of a modification to the contribution and indemnification
agreement previously executed by existing Guarantors, satisfactory to
Administrative Agent in all respects, executed by each new Subsidiary of
Borrower and all Guarantors as of the date of such modification;
(i) on the date of such Permitted Acquisition, receipt by
Administrative Agent of a modification to the Pledge Agreement or Collateral
Assignment of Partnership Interests, as applicable;
(j) on the date of such Permitted Acquisition, receipt by
Administrative Agent of a modification to the Security Agreement;
(k) on the date of such Permitted Acquisition, a copy of any
promissory note executed by Borrower as a part of the Total Acquisition Price
which promissory note shall be subordinate in all respects to the Notes and the
Obligations (such subordination to be in form and substance satisfactory to
Administrative Agent);
(l) such other information and documentation as Administrative
Agent shall reasonably deem necessary in connection with the funding of such
Advance (which information shall include, without limitation, any additional
Management Services Agreement, Succession Agreement, and landlord lien waivers
and consents not previously received by Administrative Agent); and
(m) all other documents, instruments, certificates and
information to be delivered on or before the Closing Date pursuant to the terms
of this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders that:
SECTION 5.1. Existence and Power of Borrower and Guarantors. (a) Each
of Monarch Dental and MacGregor Dental (i) is a limited partnership duly
organized and existing under the laws of the State of Texas and is or will be
qualified under the laws of each state where such qualification is necessary for
it to conduct its business; and (ii) has all power and authority under its
partnership agreement and all governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted and as
contemplated to be conducted, except where the failure to have any such item
would not have a Material Adverse Effect.
(b) Each Borrower and Guarantor, other than Monarch Dental and
MacGregor Dental, (i) is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation and is or will be
qualified and in good standing under the laws of each state where such
qualification is necessary for such Person to conduct its business; and (ii) has
all corporate power and authority and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and as
contemplated to be conducted, except where the failure to have any such item
would not have a Material Adverse Effect.
SECTION 5.2. Organization. Borrower owns free and clear all of the
common stock and preferred stock, if any, of the Guarantors (other than Monarch
Dental and MacGregor Dental), and all of such stock has been collaterally
assigned to Administrative Agent (on behalf of Lenders) pursuant to the Pledge
Agreement. The Parent Companies own free and clear all of the partnership
interests (both general and limited) of Monarch Dental and MacGregor Dental, and
all of such partnership interests have been collaterally assigned to
Administrative Agent (on behalf of Lenders) pursuant to the Collateral
Assignment of Partnership Interests. Other than the ownership by the Parent
Companies of the partnership interests of Monarch Dental and MacGregor Dental,
Guarantors have no Subsidiaries.
SECTION 5.3. Authorization; Contravention. The execution, delivery and
performance of this Agreement, the Notes, the LOC Applications and the other
Loan Documents by Borrower and each Guarantor, as applicable, (a) are within
Borrower's and each Guarantor's partnership or corporate powers, (b) have been
duly authorized by all necessary action, (c) require no action by or in respect
of, or filing with, any governmental body, agency or official and (d) to the
knowledge of Borrower and each Guarantor, do not contravene, or constitute a
default under, (i) any certificate of incorporation, bylaws or agreement of
limited partnership of Borrower or any Guarantor, as appropriate, or (ii) of
applicable law or regulation or any agreement, judgment,
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 39
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injunction, order, decree or other instrument binding upon Borrower or any
Guarantor or result in the creation or imposition of any Lien on any asset of
Borrower or any Guarantor, except where such failure would not have a Material
Adverse Effect.
SECTION 5.4. Enforceable Obligations. This Agreement, the Notes, the
LOC Applications and the other Loan Documents each constitutes a valid and
binding agreement of Borrower and each Guarantor which are parties thereto,
enforceable in accordance with its terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer or similar
laws affecting creditors rights generally, and (b) the availability of equitable
remedies may be limited by equitable principles of general applicability.
SECTION 5.5. Financial Information.
(a) The current financial statements of Borrower and
Guarantors and all the other financial reports and information of Borrower and
Guarantors that have been delivered to Lenders are true and correct in all
material respects as of the date of such current financial statements and other
reports and information.
(b) Except as disclosed in writing to Lenders prior to the
Closing Date, since the later of June 30, 1999, or the date of the most recent
quarterly financial statements delivered to Administrative Agent, there has been
no material adverse change in the business, financial position or results of
operations of Borrower and Guarantors; and, there exists no condition, event or
occurrence that could reasonably be expected to result in a material adverse
change in the business, financial position or results of operations of Borrower
and Guarantors taken as a whole.
SECTION 5.6. Litigation. Except as set forth in Schedule IV or as
otherwise disclosed to Administrative Agent, there is no action, suit or
proceeding pending against, or to the knowledge of Borrower, threatened against
or affecting Borrower, the Guarantors or the Providers before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, financial position or results of operations of any of
Borrower, Guarantors or the Providers or which could in any manner draw into
question the validity of the Loan Documents.
SECTION 5.7. ERISA.
(a) Each Employee Plan has been maintained and administered in
substantial compliance with the applicable requirements of the Code and ERISA.
No circumstances exist with respect to any Employee Plan that could have a
Material Adverse Effect.
(b) With respect to each Pension Plan, (i) no accumulated
funding deficiency (within the meaning of Section 412(a) of the Code), whether
waived or unwaived, exists; (ii) the present value of accrued benefits (based on
the most recent actuarial valuation prepared for each
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 40
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such plan, if any, in accordance with ongoing assumptions) does not exceed the
current value of plan assets allocable to such benefits by a material amount;
(iii) no reportable event (within the meaning of Section 4043 of ERISA) has
occurred other than a reportable event with respect to which the 30-day notice
requirement has been waived by regulation; (iv) no uncorrected prohibited
transactions (within the meaning of Section 4975 of the Code) exist which could
have a Material Adverse Effect and for which there exists no statutory or
regulatory exception; (v) to the extent such plan is covered by PBGC, no
material liability to the PBGC exists and no circumstances exist that could
reasonably be expected to result in any such liability; and (vi) no material
withdrawal liability (within the meaning of Section 4201(a) of ERISA) exists and
no circumstances exist that could reasonably be expected to result in any such
liability.
(c) As of the date hereof, neither Borrower, nor any Guarantor
has any obligation under any Employee Plan to provide post-employment health
care benefits to any of its current or former employees, except as may be
required by Section 4980B of the Code or otherwise required by law.
SECTION 5.8. Taxes and Filing of Tax Returns. Borrower and each
Guarantor has filed all material tax returns required to have been filed and has
paid or has made adequate provision for payment of all Taxes shown to be due and
payable on such returns, including interest and penalties, and all other Taxes
which are payable by such party, to the extent the same have become due and
payable other than Taxes with respect to which a failure to pay would not have a
Material Adverse Effect. Borrower has no knowledge of any proposed Tax
assessment against Borrower or any Guarantor other than customary ad valorem
taxes or other Taxes to become due in the normal course of business, and all Tax
liabilities of Borrower and each Guarantor is adequately provided for. No income
tax liability of Borrower or any Guarantor has been asserted by the Internal
Revenue Service for Taxes in excess of those already paid, the payment of which
would have a Material Adverse Effect.
SECTION 5.9. Ownership or Lease of Assets. Borrower and Guarantors
have good title to all of their assets. Borrower and Guarantors own or lease all
of the assets necessary to satisfy their obligations under their respective
Management Services Agreements and to enable the Providers to continue their
businesses as conducted prior to any connection of such Provider with Borrower.
Borrower's only material assets are shares of stock of it Subsidiaries, and the
Parent Companies' only material assets are the partnership interests of Monarch
Dental and MacGregor Dental. There is no Lien on Borrower's or any Guarantor's
assets other than the Permitted Encumbrances and Liens described in Section 7.8,
and the execution, delivery, performance or observance of the Loan Documents
will not require or result in the creation of any other Lien on Borrower's or
any Guarantor's assets.
SECTION 5.10. Business; Compliance. Borrower and each Guarantor has
performed and abided by all obligations required to be performed by it under any
license, permit, order, authorization, grant, contract, agreement, or regulation
to which it is a party or by which it or any
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 41
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of its assets are bound and which, if any such Person were to fail to perform or
abide by, such failure would have a Material Adverse Effect.
SECTION 5.11. Compliance with Law. The business and operations of
Borrower and each Guarantor have been and are being conducted in accordance with
all applicable Laws, rules and regulations of all Governmental Authorities
(including, without limitation, all Dental Practice Laws and Fraud and Abuse
Laws), other than violations which would not (either individually or
collectively) have a Material Adverse Effect.
SECTION 5.12. Full Disclosure. All information heretofore furnished by
Borrower and each Guarantor (or any other party on Borrower's behalf) to
Administrative Agent and Lenders for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by Borrower or any Guarantor to Administrative Agent and any
Lender will be, true and accurate in every material respect and shall be, to the
best of the knowledge and belief of the party furnishing such information,
without material omission. Other than general industry trends which are not
specific to Borrower, Borrower and each Guarantor have, to the best of their
knowledge, disclosed to Administrative Agent in writing any and all facts which
might reasonably be expected to materially and adversely affect the business,
operations, prospects or condition, financial or otherwise, of Borrower,
Guarantors or Providers taken as a whole, or the ability of Borrower or any
Guarantor to perform its obligations under this Agreement or the other Loan
Documents.
SECTION 5.13. Environmental Matters. Except as disclosed on Schedule
VI or as otherwise disclosed to Administrative Agent, Borrower (i) does not know
of any environmental condition or circumstance, such as the presence of any
hazardous substance (as defined in Section 6.7), adversely affecting the
properties or operation of Borrower and Guarantors, (ii) has not received any
report of a violation by Borrower or any Guarantor of any Applicable
Environmental Law, or (iii) does not know that Borrower or any Guarantor is
under any obligation to remedy any violation of any Applicable Environmental
Law.
SECTION 5.14. Purpose of Credit. Borrower will use the proceeds of the
Credit Facility for the purposes stated in Section 2.1 hereof. No part of the
proceeds of the Credit Facility will be used, directly or indirectly, for a
purpose which violates any law, rule or regulation. Borrower will not, directly
or indirectly, use any of the proceeds of the Credit Facility for the purpose of
purchasing or carrying, or retiring any Debt which was originally incurred to
purchase or carry, any "margin stock" as defined in the Margin Regulations, or
to purchase or carry any "security that is publicly-held" within the meaning of
Regulation T of the Board of Governors of the Federal Reserve System, or
otherwise take or permit any action which would involve a violation of such
Margin Regulations or any other regulation of such Board of Governors. Borrower
will not engage principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" within the meaning of the Margin Regulations.
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SECTION 5.15. Governmental Regulations. Neither Borrower nor any
Guarantor is subject to regulation under (a) the Investment Advisers Act of
1940, as amended, (b) the Investment Company Act of 1940, as amended, (c) the
Public Utility Borrower Act of 1935, as amended, (d) any Margin Regulations, or
(e) any other Law, rule or regulation which regulates the incurrence of Debt.
SECTION 5.16. Indebtedness. As of the Closing Date, neither Borrower,
nor any Guarantor is an obligor on any Debt other than Debt permitted by Section
7.6.
SECTION 5.17. Insurance. Borrower and each Guarantor maintains with
financially sound, responsible and reputable insurance companies or associations
(or, as to workers' compensation or similar insurance, with an insurance fund or
by self-insurance authorized by the jurisdictions in which it operates)
insurance concerning its properties and business against such casualties and
contingencies and of such types and in such amounts (and with co-insurance and
deductibles) as is customary for the same or similar businesses.
SECTION 5.18. Solvency. As of the Closing Date (a) the aggregate fair
market value of Borrower's and its Subsidiaries' assets, on a consolidated
basis, exceeds the aggregate amount of Borrower's and its Subsidiaries' Debts
(whether contingent, subordinated, unmatured, unliquidated, or otherwise), on a
consolidated basis, (b) Borrower and its Subsidiaries, on a consolidated basis,
have sufficient cash flow to enable them to pay their Debts as they mature, and
(c) Borrower and its Subsidiaries, on a consolidated basis, have a reasonable
amount of capital to conduct their business as presently contemplated.
SECTION 5.19. Providers Compliance with Dental Practice Laws and Fraud
and Abuse Laws. Without limiting any other provision of this Agreement,
Borrower has no knowledge that any Provider is in violation of any Dental
Practice Law or any Fraud and Abuse Law other than violations which would not
(either individually or collectively) have a Material Adverse Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as Lenders' commitment to
make Advances under the Credit Facility remains in effect, any Letters of Credit
remain outstanding or any of the Obligations remain unpaid:
SECTION 6.1. Information From Borrower. Borrower will deliver, or
cause to be delivered, to Administrative Agent on behalf of Lenders:
(a) As soon as available and in any event within one hundred
twenty (120) days after the end of Borrower's Fiscal Year, (i) consolidated and
consolidating financial statements of Borrower (such financial statements shall
include, without limitation, a balance
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sheet of Borrower as of the end of such Fiscal Year and the related statements
of income and cash flow for such Fiscal Year), setting forth in each case in
comparative form the figures for the previous Fiscal Year, all reported by such
Person in accordance with GAAP and audited with an unqualified opinion issued by
a nationally recognized independent public accounting firm reasonably acceptable
to Administrative Agent, (ii) a copy of the opinion issued by such accounting
firm, and (iii) a copy of any management letter issued by such accounting firm.
(b) As soon as available and in any event within forty-five
(45) days after the end of each calendar quarter, a consolidated and
consolidating balance sheet and related statement of income of Borrower as of
the end of such quarter and year-to-date, all certified by the chief financial
officer or the chief accounting officer of such Person as to fairness of
presentation and as to whether such financial statements fairly reflect the
financial condition of such Person as of the date of delivery thereof, subject
to year-end adjustments. Such financial statements shall be prepared in
conformity with GAAP, except that certain information and note disclosures
normally included in annual financial statements prepared in accordance with
GAAP may be condensed or omitted provided that the disclosures made are adequate
to make the information presented not misleading, and GAAP shall be applied on a
basis consistent with the financial statements referred to in Section 6.1(a).
(c) As soon as available and in any event within thirty (30)
days after the end of each calendar month, a consolidated balance sheet and
related statement of income of Borrower as of the end of such month, certified
by the chief financial officer or chief accounting officer of such Person. Such
financial statements shall be prepared in conformity with GAAP, except that
certain information and note disclosures normally included in annual financial
statements prepared in accordance with GAAP may be condensed or omitted provided
that the disclosures made are adequate to make the information presented not
misleading, and GAAP shall be applied on a basis consistent with the financial
statements referred to in Section 6.1(a).
(d) Simultaneously with the delivery of each set of financial
statements referred to in Sections 6.1(a) and (b) and each Request for Advance,
a certificate of an Authorized Officer of Borrower, (i) setting forth in
reasonable detail the calculations required to establish compliance with the
requirements of Sections 7.1 through and including Section 7.7, on the date of
such financial statements, (ii) attesting to compliance with the terms of the
Loan Documents, and (iii) with respect only to the financial statements
delivered pursuant to Sections 6.1(a) and (b), stating, to the best of such
Authorized Officer's knowledge and belief, whether or not such financial
statements fairly reflect in all material respects the financial condition of
Borrower and results of Borrower's operations as of the date of the delivery of
such financial statements.
(e) As soon as available and in any event within sixty (60)
days after the end of each Fiscal Year, Borrower shall provide financial
projections (including, but not limited to, a capital expenditure budget) for
the ensuing fiscal year for Borrower, in form reasonably satisfactory to
Administrative Agent. Borrower shall provide updated projections with each
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 44
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Acquisition for which Borrower may request an Advance and shall obtain approval
of Lenders for all Permitted Acquisitions.
(f) As soon as available and in any event within thirty (30)
days after the end of each Fiscal Year, Borrower's operating lease schedule.
(g) As soon as available and in any event within ninety (90)
days after the end of each Fiscal Year, copies of all existing significant
dental health maintenance organization contracts involving Borrower or the
Providers with quarterly updates for new contracts and/or changes to existing
contracts to be delivered within sixty (60) days following the execution of such
new contract or change to existing contract. For purposes of this provision, a
dental health maintenance organization contract shall be significant if such
contract generates revenues for Borrower in excess of $5,000,000.00 annually.
(h) Immediately upon an Authorized Officer becoming aware of
the occurrence of any Default, a certificate of an Authorized Officer of
Borrower setting forth the details thereof and the action which Borrower is
taking or propose to take with respect thereto.
(i) Prompt notification of (i) any material adverse change in
the financial condition of Borrower or any Guarantor, including, without
limitation, the occurrence of any litigation which could reasonably be expected
to have a Material Adverse Effect, or (ii) the occurrence of any acceleration of
the maturity of any indebtedness owing by Borrower or any Guarantor, or any
default under any indenture, mortgage, agreement, contract or other instrument
to which Borrower or any Guarantor is a party or by which Borrower or any
Guarantor or any properties of Borrower or any Guarantor is bound, if such
default or acceleration might have a Material Adverse Effect. Nothing contained
in this Section 6.1(i) shall be deemed a waiver or modification in any manner of
any restrictions on the right of Borrower or any Guarantor to incur Debt or
encumber its Assets contained in this Agreement or in any of the Loan Documents.
(j) In connection with each Acquisition, (i) an unconditional
guaranty of the Obligations by each new Subsidiary of Borrower in form and
substance acceptable to Administrative Agent, (ii) a contribution and
indemnification agreement in form and substance acceptable to Administrative
Agent, executed by each new Subsidiary and the Guarantors, (iii) the stock
certificates of each new Subsidiary, (iv) blank stock powers for each such stock
certificate, (v) a modification to the Security Agreement which adds each new
Subsidiary as a debtor thereunder, (vi) a modification to the Pledge Agreement,
(vii) a copy of any Management Services Agreement, (viii) a copy of any
Succession Agreement, (ix) landlord lien waivers and consents as requested by
Administrative Agent, and (x) evidence satisfactory to Administrative Agent that
any promissory note executed by Borrower as a part of the consideration for such
Acquisition, is subordinate in all respects to the Notes and the Obligations
(such subordination to be in form and substance satisfactory to Administrative
Agent).
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(k) From time to time such additional information regarding
the financial position or business of Borrower or any Guarantor as
Administrative Agent, at the request of any Lender, may reasonably request,
including, without limitation, information concerning the insurance being
maintained by Borrower and Guarantors.
SECTION 6.2. Business of Borrower. The primary businesses of Borrower
are, and Borrower covenants that they shall remain, the providing of
comprehensive management and related administrative services to the dental
practices pursuant to the Management Services Agreements and the ownership and
maintenance of assets related thereto.
SECTION 6.3. Right of Inspection. Borrower will permit Administrative
Agent or any Lender, or any officer, employee or Administrative Agent of any
such party, to visit and inspect any of the assets of Borrower, examine the
books of record and accounts of Borrower, take copies and extracts therefrom,
and discuss the affairs, finances and accounts of Borrower with the respective
officers, accountants and auditors of Borrower, all at such reasonable times and
as often as Administrative Agent or any Lender may reasonably require and, prior
to the occurrence of an Event of Default, at the expense of Administrative Agent
or such Lender.
SECTION 6.4. Maintenance of Insurance. (a) Borrower and each Guarantor
will at all times maintain or cause to be maintained insurance covering its
respective risks as are customarily carried by businesses similarly situated
including, without limitation, the following: (i) workmen's compensation
insurance; (ii) comprehensive general public liability and property damage
insurance in respect of all activities in which such Person might incur personal
liability for the death or injury of an employee or third person, or damage to
or destruction of another's property; (iii) insurance against loss or damage by
fire, lightning, hail, tornado, explosion and other similar risk; and (iv)
comprehensive automobile liability insurance. Borrower and each Guarantor shall
maintain coverage with respect to the foregoing risks in such coverage amounts
as are customarily carried by businesses similarly situated.
(b) Borrower and each Guarantor shall maintain insurance for
claims, however characterized, against them in connection with the provision of
dental services by Providers and/or ancillary services covered by the Management
Services Agreements, in an amount determined by Borrower and approved by
Administrative Agent, which insurance shall name Administrative Agent as an
additional insured. Borrower shall further cause each Provider to maintain
dental malpractice insurance of an amount which usual and customary in the
dental industry.
SECTION 6.5. Payment of Taxes, Impositions and Claims. Borrower and
each Guarantor shall pay (a) all Taxes imposed upon it or any of its assets or
with respect to any of its franchises, business, income or profits, and all
Impositions not later than the due date thereof, or before any material penalty
or interest may accrue thereon and (b) all material claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or might become a Lien on any
of its assets;
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 46
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provided, however, payment of Taxes, Impositions or claims shall not be required
if and for so long as (i) the amount, applicability or validity thereof is
currently being contested in good faith by appropriate action promptly initiated
and diligently conducted in accordance with good business practices and no
material part of the property or assets of such Person are subject to levy or
execution, (ii) such Person, as required in accordance with GAAP, shall have set
aside on its books reserves (segregated to the extent required by GAAP) deemed
by it to be adequate with respect thereto, and (iii) Borrower has notified
Administrative Agent of such circumstances, in detail satisfactory to
Administrative Agent, and, provided further, that the applicable Person shall
pay any such Tax, Imposition or claim if such contest is not successful and in
any event prior to the commencement of any action to realize upon or foreclose
any lien against any of such Person's Assets.
SECTION 6.6. Compliance with Laws and Documents. Borrower shall at all
times observe and comply, and cause each Guarantor to observe and comply, with
all Laws (including but not limited to, the Dental Practice Laws and Fraud and
Abuse Laws), limited partnership agreements, articles of incorporation and
bylaws of Borrower and each Guarantor, as appropriate, and any other agreement
to which Borrower or any Guarantor is a party, unless its failure to so comply
alone or in the aggregate would not have a Material Adverse Effect. Borrower and
each Guarantor shall maintain all certificates, franchises, permits, licenses,
and authorizations necessary to the conduct of its business or the operation of
its properties, except when the failure to maintain such items would not have a
Material Adverse Effect. Borrower and each Guarantor shall use its best efforts
to assure the compliance by all Providers with all applicable Laws, including,
but not limited to, Dental Practice Laws and Fraud and Abuse Laws, relating to
their providing of professional services, except for those which, if violated
and full penalties were imposed for such violation, would not cause a Material
Adverse Effect.
SECTION 6.7. Environmental Law Compliance and Indemnity. Borrower
agrees to promptly pay and discharge when due all debts, claims, liabilities and
obligations with respect to any clean-up measures necessary for Borrower to
comply with Applicable Environmental Laws affecting Borrower. Borrower hereby
indemnifies and agrees to defend and hold Administrative Agent and each Lender
and its successors and assigns harmless from and against any and all claims,
demands, causes of action, loss, damage, liabilities, costs and expenses
(including reasonable attorneys' fees and court costs) of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by Administrative Agent or any Lender at any time and from time to time
including, without limitation, those asserted or arising subsequent to the
payment or other satisfaction of the Notes and expiration of the Letters of
Credit, by reason of, arising out of or related in any way to Administrative
Agent's and Lenders' entering into this Agreement and the transactions herein
contemplated, INCLUDING MATTERS ARISING OUT OF THE ORDINARY NEGLIGENCE OF
ADMINISTRATIVE AGENT OR ANY LENDER (WHETHER SOLE, CONTRIBUTORY OR COMPARATIVE),
BUT EXCLUDING MATTERS ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF ADMINISTRATIVE AGENT OR ANY LENDER. It shall not be a defense to the covenant
of Borrower to indemnify that the act,
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 47
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omission, event or circumstance did not constitute a violation of any Applicable
Environmental Law at the time of its existence or occurrence. The terms
"hazardous substance" and "release" shall have the meanings specified in the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), and the terms
"solid waste" and "disposed" shall have the meanings specified in the Resource
Conservation and Recovery Act of 1976 ("RCRA"); provided, to the extent that any
other applicable laws of the United States of America or political subdivision
thereof establish a meaning for "hazardous substance," "release," "solid waste,"
or "disposed" which is broader than that specified in either XXXX or RCRA, such
broader meaning shall apply. As used in this Agreement, "Applicable
Environmental Law" shall mean and include the singular, and "Applicable
Environmental Laws" shall mean and include the collective aggregate of the
following: Any law, statute, ordinance, rule, regulation, order or determination
of any governmental authority or any board of fire underwriters (or other body
exercising similar functions), or any restrictive covenant or deed restriction
(recorded or otherwise) affecting Borrower pertaining to health, safety or the
environment, including, without limitation, all applicable flood disaster laws
and health, safety and environmental laws and regulations pertaining to health,
safety or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), the
Resource Conservation and Recovery Act of 1976, the Superfund Amendments and
Reauthorization Act of 1986, the Occupational Safety and Health Act, the Texas
Water Code, the Texas Solid Waste Disposal Act, the Texas Workers' Compensation
Laws, and any federal, state or municipal laws, ordinances, regulations or law
which may now or hereafter require removal of asbestos or other hazardous wastes
from any property of Borrower or impose any liability on Administrative Agent or
any Lender related to asbestos or other hazardous wastes in any property of
Borrower. The provisions of this Section 6.7 shall survive the repayment of the
Notes and expiration of the Letters of Credit. In the event of the transfer of
the Notes or any portion thereof, each Lender or any prior holder of the Notes
and any participants shall continue to be benefitted by this indemnity and
agreement with respect to the period of such holding of the Notes.
SECTION 6.8. Covenant Compliance. Borrower and each Guarantor shall
perform and comply with all covenants, obligations and agreements contained in
this Agreement and in the Loan Documents applicable to such Person.
SECTION 6.9. Quantity and Quality of Documents. All certificates,
opinions, reports and documents to be delivered from time to time hereunder
shall be in such number of counterparts as Administrative Agent may reasonably
request and in form reasonably acceptable to Administrative Agent, and
counterpart signature pages to any such documents may be attached to and shall,
together with all counterparts, constitute one and the same document.
SECTION 6.10. Additional Documents. Borrower shall execute and deliver
or cause to be executed and delivered to Administrative Agent upon
Administrative Agent's reasonable request such other and further instruments or
documents as in the judgment of Administrative Agent may be reasonably required
to better effectuate the transactions contemplated herein or to conform,
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 48
49
create, evidence, perfect, preserve or maintain the Lenders' rights hereunder or
under the Loan Documents.
ARTICLE VII
NEGATIVE COVENANTS
Borrower covenants and agrees that without the prior written consent of
the Required Lenders, so long as Lenders' commitment to make Advances under the
Credit Facility remains in effect, any Letters of Credit remain outstanding or
any of the Obligations remain unpaid:
SECTION 7.1. Consolidated Funded Debt to Consolidated Capitalization.
As of the end of any calendar quarter, Borrower shall not permit the ratio of
Consolidated Funded Debt to Consolidated Capitalization to be (a) prior to and
including March 31, 2000, more than 0.63 to 1.00, (b) from April 1, 2000 through
and including December 31, 2000, more than 0.61 to 1.00, and (c) thereafter,
more than 0.55 to 1.00.
SECTION 7.2. Consolidated Funded Debt to Consolidated EBITDA. As of
the end of any calendar quarter, Borrower shall not permit the ratio of
Consolidated Funded Debt to Consolidated EBITDA for the immediately preceding
twelve months to be (a) prior to and including December 31, 1999, more than 4.00
to 1.00, and (b) thereafter, more than 3.75 to 1.00.
SECTION 7.3. Coverage Ratio. Borrower shall not permit the Fixed
Charge Coverage Ratio to be, as of the end of any calendar quarter, (i) prior to
and including December 30, 1999, less than 1.10 to 1.00, and (ii) from December
31, 1999 through and including March 30, 2000, less than 1.25 to 1.00. From and
after March 31, 2000, as of the end of any calendar quarter, Borrower shall not
permit the Hypothetical Fixed Charge Coverage Ratio to be less than 1.10 to
1.00.
SECTION 7.4. Minimum Consolidated Net Worth. As of the end of any
calendar year, Borrower shall maintain a Consolidated Net Worth of an amount
equal to the sum of (i) $41,000,000.00, plus (ii) the net proceeds of any equity
offering by Borrower which occurs subsequent to January 1, 1998, plus (iii)
seventy-five percent (75%) of Consolidated Net Income for the period from
January 1, 1998, through the date of determination (provided, that, for purposes
of calculating Consolidated Net Income under this Section 7.4, in no event shall
the Consolidated Net Income for any calendar year be less than zero), plus (iv)
the value of all equity securities issued to dentists or other investors in
connection with an Acquisition consummated after January 1, 1998.
SECTION 7.5. Consolidated Senior Funded Debt to Consolidated EBITDA.
As of the end of any calendar quarter, Borrower shall not permit the ratio of
Consolidated Senior Funded Debt to Consolidated EBITDA for the immediately
preceding twelve months to be (a) prior to
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the earlier of (i) October 1, 1999 or (ii) the closing of the Required
Institutional Debt (such date, the "Ratio Reduction Date"), more than 4.00 to
1.00, (b) for the period from the Ratio Reduction Date through and including
December 30, 1999, more than 3.50 to 1.00, (c) for the period from December 31,
1999 through and including March 31, 2000, more than 3.25 to 1.00, (d) for the
period from April 1, 2000 through and including December 31, 2000, more than
3.00 to 1.00 and (e) thereafter, more than 2.50 to 1.00; provided that the
Target Company EBITDA attributable to any Acquisition, for purposes of
calculating Consolidated EBITDA, shall, for the twelve (12) month period
commencing on the Acquisition Date, be computed by annualizing the actual Target
Company EBITDA for the period since the Acquisition Date.
SECTION 7.6. Limitation on Debt. Neither Borrower nor any Guarantor
shall incur any Debt, except for (a) the Obligations, (b) trade payables
incurred in the ordinary course of business, (c) the Debt described on Schedule
III hereto, (d) Debt in respect of (i) taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies, (ii) judgments or awards
which have been in force for less than the applicable appeal period so long as
execution is not levied thereunder or in respect of which Borrower or Guarantor
shall at the time in good faith be prosecuting an appeal or proceedings for
review and in respect of which a stay of execution shall have been obtained
pending such appeal or review, and (iii) endorsements made in connection with
the deposits of items for credit or collection in the ordinary course of
business, (e) Debt of a Person outstanding prior to the date on which such
Person was acquired by Borrower as a subsidiary, and not incurred in
contemplation thereof, provided, that in no event shall the aggregate of all
such Debt exceed $2,000,000.00, (f) capitalized lease obligations related to
capital expenditures made by Borrower as permitted by Section 7.19 hereof (and
so long as such capitalized lease obligations do not cause Borrower to be in
violation of any other covenant of this Agreement), (g) Subordinate Acquisition
Debt, (h) Permitted Institutional Debt, provided that, (1) the amount of the
Permitted Senior Institutional Debt outstanding at any time cannot exceed the
lesser of 70% of the aggregate amount of Permitted Institutional Debt
outstanding at the time of determination or $17,500,000.00, (2) the amount of
Permitted Subordinate Institutional Debt outstanding at any time cannot be less
than $7,500,000.00, and (3) the issuance of said Permitted Institutional Debt
would otherwise be permitted by the other terms and conditions of the Credit
Facility, (i) the Short Term Debt in existence on the date of the execution of
this Agreement (Lenders hereby agreeing that (1) Administrative Agent shall be
entitled to execute on behalf of Lenders any documents or agreements approved by
Administrative Agent acknowledging that the Short Term Debt is included in the
Obligations and secured by the Collateral, subject, however, to the provisions
of Section 9.6 hereof and (2) all or any portion of the proceeds of the
Permitted Institutional Debt shall be used to repay the Short Term Debt and then
to pay down the Credit Facility), and (j) refinancings, renewals or extensions
of the Debt permitted under the foregoing clauses provided that such
refinancings, renewals or extensions do not result in an increase in the
aggregate unpaid principal amount of the Debt so refinanced, renewed or
extended.
SECTION 7.7. Limitation on Sale of Properties. Neither Borrower nor
any Guarantor shall sell, assign, convey, exchange, lease or otherwise dispose
of any of its properties, rights,
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assets or business, whether now owned or hereafter acquired, except (a) in the
ordinary course of its business, (b) obsolete or worn out property, or equipment
sold in contemplation of the acquisition of replacement equipment of at least
equal value or utility, and (c) the sale or other disposition of any property
other than as described above, provided that the aggregate book value of all
assets so sold or disposed of in any Fiscal Year shall not exceed $250,000.00.
SECTION 7.8. Limitations on Liens. Neither Borrower nor any Guarantor
shall create, incur, assume or suffer to exist any Lien upon any of its assets
other than (a) the Permitted Encumbrances, (b) Liens existing as of the Closing
Date and described in Schedule V, (c) Liens existing on any asset prior to the
acquisition thereof by Borrower or any Guarantor and not created in
contemplation of such acquisition, (d) Liens arising out of the refinancing,
extension or renewal or refunding of any debt secured by any lien permitted
under this Section 7.8, (e) Liens on security deposits with respect to leases of
office space and other liens arising by operation of law or under leases to
secure landlords or lessors, or under leases or rental agreements made in the
ordinary course of business and confined to the premises or property rented and
the tangible property located thereon, (f) liens related to the capitalized
lease obligations permitted in Section 7.6, and (g) Liens in favor of
Administrative Agent and the Lenders.
SECTION 7.9. Consolidations, Mergers, Acquisitions, Sales of Assets,
and Maintenance.
(a) Except for Acquisitions specifically permitted by the
terms of this Section 7.9, neither Borrower nor any Guarantor shall, without
prior approval of Required Lenders, (a)consolidate or merge with or into any
other Person, (b) sell, lease, abandon or otherwise transfer all or any material
part of its assets to any Person, in one or a series of related transactions, or
(c) terminate, or fail to maintain, its good standing and qualification to
transact business in all jurisdictions where the failure to maintain its good
standing or qualification to transact business could have a Material Adverse
Effect; provided, however, that Borrower or any Guarantor may merge with or into
Borrower or any other Guarantor. Borrower shall not make any Acquisitions, other
than Permitted Acquisitions, without the prior written consent of Required
Lenders. In addition, Borrower shall not make any Permitted Acquisition if the
Total Acquisition Price of such Permitted Acquisition, when added to the Total
Acquisition Price of all Permitted Acquisitions consummated within the twelve
(12) month period immediately preceding the Acquisition Date of such Permitted
Acquisition would exceed $30,000,000, without the prior written consent of
Required Lenders (other than Minor Acquisitions in an aggregate amount not to
exceed $10,000,000, which shall require only Administrative Agent's consent).
Required Lenders' and Administrative Agent's consent as provided in this Section
shall be predicated upon, among other things, receipt and approval of the items
specified in Section 4.5, regardless of whether an Advance is requested in
connection therewith.
(b) Notwithstanding anything contained in this Agreement
(including, without limitation, the terms and conditions of subsection (a)
above) during the pendency of any Short Term Debt and until the closing of the
Required Institutional Debt and the application of the
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proceeds thereof in accordance with the terms of this Agreement, Borrower shall
not make any Acquisition (regardless of whether such Acquisition would
constitute a Permitted Acquisition) unless (i) Borrower has at least $4,000,000
of availability under the Credit Facility and/or any Short Term Debt (or a
combination thereof), (ii) the cash portion of the Total Acquisition
Consideration of such Acquisition, when added to the cash portion of the Total
Acquisition Consideration of all Acquisitions consummated during the calendar
quarter in which such Acquisition is consummated, does not exceed $350,000,
(iii) the Total Acquisition Price of such Acquisition is less than $2,000,000.00
and (iv) Target Company EBITDA for any such Acquisition must be greater than
$1.00 . In any calendar quarter during which Borrower does not make Acquisitions
where the cash portion of the Acquisition Consideration total $350,000, the
difference may be carried forward to subsequent calendar quarters during that
calendar year.
SECTION 7.10. Investments. Neither Borrower, nor any Guarantor, shall
directly or indirectly, make any Acquisitions or any loans, advances, extensions
of credit or capital contributions to, make any investment in, or purchase any
stock or securities of, or interest in, any Person, except for (a) Permitted
Investments, (b) the ownership by Borrower of the stock of its Subsidiaries, (c)
the ownership by the Parent Companies of the partnership interests of Monarch
Dental and MacGregor Dental, (d) Acquisitions permitted hereunder or consented
to by Administrative Agent and, if required, the Lenders, (e) investments in the
form of loans, advances or other obligations owed by Borrower or any Guarantor
to Borrower or any other Guarantor and (f) investments in the form of loans or
advances made by Borrower or any Guarantor to any employee provided that such
loans or advances do not exceed $50,000 outstanding to all employees at any
time.
SECTION 7.11. Distributions. Neither Borrower nor any Guarantor shall
make or declare any Distributions until the Obligations have been paid in full
except for payments in respect of redemptions or repurchases of Borrower's
stock, provided that the maximum payments in respect thereof shall not exceed
$500,000.00 in the aggregate.
SECTION 7.12. Transactions with Affiliates. Except in connection with
any Acquisition permitted hereunder or approved by Lenders, neither Borrower nor
any Guarantor shall engage in any transaction with an Affiliate of Borrower or
any Guarantor unless such transaction is generally as favorable to Borrower or
such Guarantor as could be obtained in an arm's length transaction with an
unaffiliated Person in accordance with prevailing industry customs and
practices.
SECTION 7.13. Employee Plans.
(a) Neither Borrower nor any Guarantor shall permit or suffer
to exist any circumstances with respect to any Employee Plan that is likely to
have a Material Adverse Effect. Borrower and each Guarantor shall use its best
efforts to maintain and administer, and to cause each member of its Controlled
Group (as that term is defined in the Code) to maintain and
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administer, any Employee Plan in accordance with the applicable requirements of
the Code and ERISA.
(b) With respect to any Pension Plan, neither Borrower nor any
Guarantor shall (i) permit any accumulated funding deficiency (within the
meaning of Section 412(a) of the Code), whether waived or unwaived, to exist;
(ii) permit the present value of accrued benefits (based on the most recent
actuarial valuation prepared for each such plan, if any, in accordance with
ongoing actuarial assumptions) to exceed the current value of plan assets
allocable to such benefits by a material amount; (iii) permit any reportable
event (within the meaning of Section 4043 of ERISA) to occur, other than a
reportable event with respect to which the 30-day notice requirement has been
waived by regulation; (iv) permit a prohibited transaction (within the meaning
of Section 4975 of the Code) for which there exists no statutory or regulatory
exception to occur which has or could have a Material Adverse Effect; (v) incur
any material liability to the PBGC; or (vi) incur any material withdrawal
liability (within the meaning of Section 4201(a) of ERISA).
(c) Neither Borrower nor any Guarantor shall incur a material
obligation to provide post-employment health care benefits to any of its current
or former employees, except as may be required by Section 4980B of the Code or
otherwise required by law.
SECTION 7.14. Use Violations. Neither Borrower nor any Guarantor shall
use, maintain, operate or occupy, or allow the use, maintenance, operation or
occupancy of, any of its properties in any manner which (a) violates any Legal
Requirement unless such violation would not have a Material Adverse Effect, or
(b) makes void, voidable or cancelable any insurance then in force with respect
thereto.
SECTION 7.15. Fiscal Year and Accounting Methods. Neither Borrower nor
any Guarantor will change its Fiscal Year or its method of accounting (other
than changes as are concurred with by such Person's independent public
accountants as being required by GAAP).
SECTION 7.16. Governmental Regulations. Neither Borrower nor any
Guarantor will conduct its business in such a way that it will become subject to
regulation under the Investment Advisers Act of 1940, as amended. Neither
Borrower nor any Guarantor will conduct its business in such a way that it will
become subject to regulation under the Investment Company Act of 1940, as
amended, or the Public Utility Borrower Act of 1935, as amended, or any other
laws, rules or regulations which regulate the incurrence of Debt.
SECTION 7.17. Changes in Management. Neither Borrower nor any Guarantor
shall voluntarily change its chief executive officer, chief financial officer,
chief operating officer or president without giving Administrative Agent written
notice of any such change within five (5) days of notifying the affected officer
of such change.
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SECTION 7.18. Repurchase of Stock. Neither Borrower nor any Guarantor
shall purchase any of the stock of any of the Guarantors or Borrower in excess
of $500,000.00 in the aggregate during the term of the Credit Facility without
prior notice to and approval of Lenders.
SECTION 7.19. Capital Expenditures. Neither Borrower nor any Guarantor
shall make any capital expenditure if the aggregate capital expenditures made by
Borrower and Guarantors during the immediately preceding four (4) calendar
quarters exceeds the product of (i) nine percent (9%), times (ii) gross revenues
for Borrower and the Guarantors on a consolidated basis (calculated in
accordance with GAAP) for such four (4) calendar quarter period.
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1. Events of Default. The term "Event of Default" as used in
this Agreement, shall mean any one of the following:
(a) The failure of Borrower to pay when due any principal of
or interest on the Notes, or any fees, charges or any other amounts payable to
Administrative Agent or any Lender hereunder or under any of the Notes or other
Loan Documents. Administrative Agent shall endeavor to give Borrower notice that
an Event of Default has occurred under this Section 8.1(a), but the failure of
Administrative Agent to give such notice shall not (i) affect the validity of
such Event of Default, (ii) give rise to any liability of Administrative Agent
or any Lender to Borrower or any other Person, or (iii) give rise to any rights,
remedies, defenses or offsets to Borrower's obligations or Administrative
Agent's or any Lender's rights under this Agreement or any Loan Document.;
(b) The failure, refusal or neglect of Borrower to observe,
perform or comply with any covenant or agreement contained in Section 6.10 or
Article VII other than Sections 7.12 and 7.13 (which are covered by Section
8.1(c));
(c) The failure, refusal or neglect of Borrower to properly
observe, perform or comply with any covenant, agreement or obligation contained
in this Agreement, or any of the other Loan Documents [other than those covered
by Sections 8.1(a) and (b)] and the continuation of such failure, refusal or
neglect for twenty (20) days after written notice thereof has been given to
Borrower by Administrative Agent or a representative of Administrative Agent;
(d) Any representation, warranty, certification or statement
made by Borrower (either for itself or for any other Person) in this Agreement
or by Borrower or any other Person on behalf of Borrower in any certificate,
financial statement or other document delivered pursuant to this Agreement or
any other Loan Document shall prove to have been untrue in any material respect
when made or deemed to have been made;
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(e) The occurrence of any event or condition which results in
the acceleration of the maturity of any Debt in excess of $250,000 of Borrower
or any Guarantor;
(f) The filing or commencement by Borrower or any Guarantor of
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 Borrower or any
Guarantor 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;
(g) The filing or commencement of an involuntary case or other
proceeding against Borrower or any Guarantor seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) days; or an
order for relief shall be entered against Borrower or any Guarantor under the
federal bankruptcy laws as now or hereafter in effect;
(h) The liquidation or dissolution of Borrower or any
Guarantor;
(i) One or more judgments or orders for the payment of money
aggregating in excess of $100,000.00 (net of insurance proceeds) shall be
rendered against Borrower or any Guarantor and such judgment or order (A) other
than the Xxxxxxxx Judgment, which shall not be subject to the terms of this
subsection (A), shall continue unsatisfied and unstayed (unless bonded with a
supersedeas bond at least equal to such judgment or order) for a period of
thirty (30) days, or (B) is not fully paid and satisfied at least ten (10) days
prior to the date on which any of its assets may be lawfully sold to satisfy
such judgment or order; or
(j) The occurrence of any action by any Governmental Authority
that results in the revocation of the license or licenses of any Provider, if
the gross revenues to Borrower arising from the affected Provider or Providers
exceed ten percent (10%) of the immediately preceding fiscal year's aggregate
payments made under the Management Services Agreements.
(k) The failure of Borrower to raise $25,000,000.00 in gross
proceeds of Permitted Institutional Debt (the "Required Institutional Debt") and
to use such proceeds to fully repay the Short Term Debt and reduce the balance
of the Credit Facility on or before December 31, 1999.
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It is understood and agreed by Borrower that any of the foregoing
"Events of Default" shall constitute an Event of Default under each of the
Notes, and that such "Events of Default" are cumulative and in addition to any
default or events of default contained in any of the other Loan Documents, and
that in the event of any discrepancy or inconsistency between any Event of
Default hereunder and any default or event of default contained in any other
Loan Document, the description of the Event of Default stated herein shall
control.
SECTION 8.2. Remedies. Upon the occurrence of an Event of Default,
Administrative Agent shall have the right, at the direction and election of the
Required Lenders, acting by or through any of its Administrative Agents,
trustees or other Persons, without notice (unless expressly provided for
herein), demand or presentment (including, without limitation, notice of
default, notice of intent to accelerate or of acceleration) all of which are
hereby waived, and in addition to any other provision of this Agreement or any
other Loan Document, to exercise any or all of the following rights, remedies
and recourses:
(a) Terminate the Credit Facility and declare the unpaid
principal balance of each of the Notes, the accrued and unpaid interest thereon
and any other accrued but unpaid portion of the Obligations to be immediately
due and payable, without notice (other than notice of the occurrence of an Event
of Default sent by Administrative Agent or Lenders to Borrower simultaneously
with such acceleration of the Obligations) (expressly including, but not limited
to, notice of default, notice of intent to accelerate or of acceleration),
except any notice that is expressly required by the terms of this Agreement or
presentment, protest, demand or action of any nature whatsoever, each of which
hereby is expressly waived by Borrower, whereupon the same shall become
immediately due and payable. Notwithstanding the foregoing or anything to the
contrary contained herein or in any Loan Document, upon the occurrence of an
Event of Default described in Section 8.1(f), or Section 8.1(g) by Borrower, the
entire unpaid principal balance of the Notes, and all accrued, unpaid interest
thereon shall automatically be accelerated and immediately be due and payable in
full, without notice (expressly including, but not limited to, notice of
default, intent to accelerate or of acceleration), presentment, protest, demand
or action of any nature whatsoever, each of which hereby is expressly waived by
Borrower; provided, however, that if accelerated automatically pursuant to this
sentence, the Notes and all such indebtedness may be reinstated at the option
and upon the written approval of the each Lender.
(b) Sell or offer for sale the Collateral, or any part
thereof, in such portions and order as Administrative Agent may determine in
accordance with the provisions of the applicable Loan Documents and applicable
Legal Requirements.
(c) Make application to a court of competent jurisdiction, as
a matter of strict right and, except as otherwise provided by applicable Law,
without notice to Borrower or any Guarantor or without regard to the adequacy of
the Collateral for the payment of the Obligations, for the appointment of a
receiver of the Collateral, or any part thereof, and to the extent permitted by
applicable Law, Borrower does hereby irrevocably consent to such appointment.
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Any such receiver shall have all the usual powers and duties of
receivers in similar cases, including the full power to sell, dispose and
otherwise deal with the Collateral, or any part thereof, upon such terms that
may be approved by the court, and shall apply all proceeds from the Collateral
in accordance with the provisions of Section 8.9 hereof.
(d) Exercise any and all other rights, remedies and recourses
granted hereunder or under the Loan Documents or otherwise now or hereafter
existing in equity, at law, by virtue of statute or otherwise.
SECTION 8.3. Rights of Set-Off.
(a) Borrower hereby expressly grants to Lenders the right of
setoff against all deposits and other sums at any time held or credited by or
due from any Lender to Borrower, in accordance with the provisions of this
Section 8.3. The rights of each Lender under this Section 8.3 are in addition to
other rights and remedies (including, without limitation, other rights of setoff
under law or equity) which such Lender may have under law or by agreement.
(b) Upon the occurrence and during the continuance of any
Event of Default, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, at its option, without notice or
demand and without liability, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, excepting, however, any
fiduciary or escrow accounts established by Borrower into which only funds of
unrelated third-parties are deposited, and provided that Borrower has informed
such Lender and Administrative Agent of the nature of such accounts) at any time
held, and other indebtedness at any time owing, by any Lender to or for the
credit or the account of Borrower against any and all of the Obligations now or
hereafter existing under this Agreement, the Notes and the other Loan Documents,
in such order and manner as such Lender may determine, subject, however, to the
agreements contained in Section 9.14 hereof, regardless of whether such Lender
shall have made any demand under this Agreement or the Notes and although such
obligations may be unmatured.
(c) Borrower agrees, to the fullest extent it may effectively
do so under applicable Law, that each Lender and any holder of a participation
in any of the Notes (with the appropriate consent of such Lender) may exercise
rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of Borrower in the amount of such participation.
SECTION 8.4. Remedies Cumulative, Concurrent and Non-Exclusive.
Lenders shall have all rights, remedies and recourses granted in the Loan
Documents, and available at law or equity and same (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or concurrently against
Borrower or any Guarantor, or any others obligated under any of the Notes, or
against any one or more of them, at the sole discretion of Lenders, (c) may be
exercised as often as the occasion therefor shall arise, it being agreed by
Borrower that the exercise or failure to exercise any of same shall in no event
be construed as a waiver or release
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thereof or of any other right, remedy or recourse, and (d) are intended to be,
and shall be, non-exclusive.
SECTION 8.5. No Conditions Precedent to Exercise Remedies. Borrower,
Guarantors and any other Person hereafter obligated for payment or fulfillment
of all or any part of the Obligations shall not, except as otherwise provided by
applicable Law, be relieved of such obligation by reason of (a) the failure of a
trustee to comply with any request of Borrower or any Guarantor, or any other
person so obligated to enforce any provisions of the Loan Documents, (b) the
release, regardless of consideration, of any Person obligated with respect to
the Obligations, or of the Collateral or any part thereof, or the additions of
any Collateral in the future, and (c) any other act or occurrence, save and
except the complete payment of the Obligations. Borrower waives any right to
require Lenders to proceed against any other Person, exhaust any Collateral or
pursue any other remedy in Lenders' power. All dealings between Borrower and any
Lender, whether or not resulting in the creation of the Obligations, shall
conclusively be presumed to have been had or consummated upon reliance upon this
Agreement. Borrower authorizes Lenders, without notice or demand and without any
reservation of rights against Borrower and without affecting liability hereunder
or on the Obligations, from time to time, to (i) renew, extend for any period,
accelerate, modify, compromise, settle, or release the obligation of any other
Person that may be obligated with respect to any or all of the Obligations or
Collateral; (ii) take and hold any property as collateral, other than the
Collateral, for the payment of any or all of the Obligations, and exchange,
enforce, waive and release any or all of the Collateral or other property; and
(iii) after the occurrence of an Event of Default, apply the Collateral or other
property and direct the order or manner of sale thereof in accordance with the
terms of this Agreement and the other Loan Documents.
SECTION 8.6. Release of and Resort to Collateral. The release or
substitution of all or any part of the Collateral, regardless of consideration,
shall not in any way impair, affect, subordinate, or release the Lenders' Liens
or their status as first and prior Liens in and to any remaining Collateral. For
payment and performance of the Obligations, Lenders may resort to any other
security therefor held by a trustee in such order and manner as Required Lenders
may elect.
SECTION 8.7. Waivers. To the full extent permitted by Law, Borrower
hereby irrevocably and unconditionally waives and releases (a) all benefit that
might accrue to Borrower by virtue of any present or future law exempting the
Collateral from attachment, levy or sale on execution or providing for the
appraisement, evaluation, stay of execution, exemption from civil process,
redemption or extension of time for payment, (b) except as specifically provided
for herein, all notices of any Default or Event of Default or of any trustee's
or Lenders' election to exercise or his or their actual exercise of any right,
remedy or recourse provided for under the Loan Documents, (c) any right to a
marshaling of assets with respect to the Notes or the Letters of Credit or any
of the Collateral or any Debt of Borrower, or a sale in inverse order of
alienation and (d) except as specifically provided for herein, any and all right
to receive demand, grace,
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notice, presentment for payment, protest, notice of intention to accelerate the
Obligations or notice of acceleration of the Obligations.
SECTION 8.8. Discontinuance of Proceedings. In case Administrative
Agent shall have proceeded to invoke any right, remedy or recourse permitted
under the Loan Documents and shall thereafter elect to discontinue or abandon
same for any reason, Administrative Agent shall have the unqualified right to do
so and, in such event, Borrower, Guarantor and Lenders shall be restored to
their former positions with respect to the Obligations, the Loan Documents, and
otherwise, and the rights, remedies, recourses and powers of Administrative
Agent and Lenders shall continue as if same had never been invoked.
SECTION 8.9. Application of Proceeds. All payments on the Notes or the
Letters of Credit received by any Lender during the existence of an Event of
Default (unless otherwise elected by Lenders), and the proceeds of any sale or
disposition of, and all proceeds generated by, the Collateral during the
existence of an Event of Default and upon the exercise of Lenders' rights and
remedies hereunder or under any of the Loan Documents, shall be applied by
Lenders, the applicable trustee or the receiver, if one is appointed, to the
extent that funds are so available therefrom, as determined by the Required
Lenders (provided that, as among themselves, Lenders agree that any such
proceeds shall be applied as contemplated by Article IX hereof).
SECTION 8.10. Power of Attorney. Borrower hereby irrevocably appoints
Administrative Agent, acting for all the Lenders, as the true and lawful
attorney of Borrower with full power of substitution for, and on behalf of
Borrower, and in its name, upon the request and instruction of Borrower and in
any event after the occurrence of an Event of Default, to take any action to
preserve, maintain, protect or enforce the rights and interests of Borrower with
respect to the Collateral, including, without limitation, to (i) enforce, cure
any default or otherwise act with respect to any leases, service contracts,
management or marketing contracts or any other agreements which are part of,
pertain to or affect any of the Collateral, (ii) take all such action and to
execute all such documents as Administrative Agent deems necessary or desirable
to preserve or protect all Accounts included in the Collateral, and (iii) xxx
for, demand or collect any sums owing to Borrower under any Accounts or under
leases or other agreements included in the Collateral. The power so vested in
Administrative Agent under this Section 8.10 is one coupled with an interest and
shall be irrevocable, except by written instrument executed jointly by Borrower
and Administrative Agent and filed for record in the Office of the County Clerk
of Dallas County, Texas. Notwithstanding the foregoing, Administrative Agent
shall be under no obligation to exercise any of the foregoing rights or take any
action necessary to preserve any right in any asset subject to the Lenders'
Liens against any other Person, and Administrative Agent, to the extent
permitted herein or by applicable law, may exercise any of the foregoing rights
without incurring any responsibility or liability to Borrower or any other
Person and without in any way affecting the Obligations or any other obligations
of Borrower or any Guarantor to Lenders. Borrower agrees to reimburse
Administrative Agent and Lenders upon demand for any costs and expenses,
including, without limitation, reasonable attorneys' fees and collection costs,
that Administrative Agent or any Lender may incur while acting as the
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attorney-in-fact of Borrower as provided hereunder (or pursuant to the
attorney-in-fact herein created), all of which costs and expenses shall be
included in the Obligations.
ARTICLE IX
ADMINISTRATIVE AGENT AND THE LENDERS
SECTION 9.1. Appointment and Authorization of Administrative Agent.
(a) Each Lender hereby irrevocably appoints and authorizes
Administrative Agent as its nominee and Administrative Agent, in its name and on
its behalf: (i) to act as nominee for and on behalf of such Lender in and under
all Loan Documents; (ii) to arrange the means whereby the funds of the Lenders
are to be made available to Borrower under the Loan Documents; (iii) to take
such action as may be requested by any Lender under the Loan Documents (when
such Lender is entitled to make such request under the Loan Documents and after
such requesting Lender has obtained the concurrence of such other Lenders as may
be required under the Loan Documents); (iv) to receive all documents and items
to be furnished to the Lenders under the Loan Documents; (v) to promptly
distribute to each Lender the material information, requests, documents and
items received from Borrower under the Loan Documents; (vi) to promptly
distribute to each Lender such Lender's Loan Percentage of each payment or
prepayment in accordance with the terms of the Loan Documents; and (vii) to
deliver to the appropriate Persons requests, demands, approvals and consents
received from the Lenders.
(b) The obligations of Administrative Agent hereunder are only
those expressly set forth herein. Each Lender and Borrower agree that
Administrative Agent is not a fiduciary for the Lenders or for Borrower but
simply is acting in the capacity described herein to alleviate administrative
burdens for both Borrower and the Lenders and that Administrative Agent has no
duties or responsibilities to the Lenders or Borrower except those expressly set
forth herein. Without limiting the generality of the foregoing, Administrative
Agent shall not be required to take any action or exercise any right or remedy
with respect to any Default or Event of Default, except if requested by the
Required Lenders. Notwithstanding the administrative authority delegated to
Administrative Agent, Administrative Agent shall not cause or permit any
modification of the Loan Documents or take other action relating to the Credit
Facility specifically requiring the consent or approval of the Required Lenders
without such consent or approval. Action taken by Administrative Agent
including, without limitation, any exercise of remedies or initiation of suit or
other legal proceedings made in accordance with the instructions of the Required
Lenders or as otherwise permitted by this Article IX, shall be binding upon each
of the Lenders.
(c) Administrative Agent, in its capacity as a Lender, shall have
the same Rights under the Loan Documents as any other Lender and may exercise
the same as though it were not acting as Administrative Agent, and any
resignation by Administrative Agent hereunder shall not
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impair or otherwise affect any Rights which it has or may have in its capacity
as an individual Lender.
(d) Administrative Agent may now or hereafter be engaged in one
or more loan, letter of credit, leasing, or other financing transactions with
Borrower or any Guarantor, act as trustee or depositary for Borrower or any
Guarantor or otherwise be engaged in other transactions with Borrower or any
Guarantor and/or their Affiliates (collectively, the "other activities") not the
subject of the Loan Documents. Without limiting the Rights of the Lenders
specifically set forth in the Loan Documents, Administrative Agent shall not be
responsible to account to the Lenders for such other activities, and no Lender
shall have any interest in any other activities, any present or future
guaranties by or for the account of Borrower or any Guarantor which are not
contemplated or included in the Loan Documents (any present or future offset
exercised by Administrative Agent in respect of such other activities), any
present or future property taken as security for any such other activities, or
any property now or hereafter in the possession or control of Administrative
Agent which may be or become security for the Obligations by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents or instruments related to any such other activities;
provided that, if any payments in respect of such guaranties, such property or
the proceeds thereof or any offset shall be applied to reduction of the
Obligations, then each Lender shall be entitled to share in such application
according to its Loan Percentage thereof.
SECTION 9.2. Possession of Instruments by Administrative Agent.
Administrative Agent shall exercise all rights and remedies under the Loan
Documents and take all actions with respect thereto in accordance with the
request or direction of the Required Lenders, or otherwise as and to the extent
provided herein or in the other Loan Documents; provided, however, that
Administrative Agent may take such actions in its name without the joinder of
the Lenders, and each Borrower and Guarantor and all third parties shall be
entitled to rely on the actions taken by Administrative Agent with respect to
the execution by Administrative Agent of any and all agreements, financing
statements, affidavits, notices or any other type of document or instrument
pertaining thereto, including, without limitation, in connection with the
exercise of any rights or remedies of the Lenders under the Loan Documents, and
the same shall be binding upon all the Lenders as to any third party relying on
such actions of Administrative Agent.
SECTION 9.3. Expenses. Each Lender shall pay its Loan Percentage of
any reasonable expenses (including, without limitation, court costs, reasonable
attorneys' fees and other costs of collection) incurred by Administrative Agent
in connection with any of the Loan Documents if Administrative Agent does not
receive reimbursement therefor from other sources within thirty (30) days after
incurred; provided that, and subject to the terms and conditions of Section
10.4, each Lender shall be entitled to receive its Loan Percentage of any
reimbursement for such expenses, or part thereof, which Administrative Agent
subsequently receives from such other sources.
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SECTION 9.4. Delegation of Duties; Reliance; Consultation. Lenders may
perform any of their duties or exercise any of their Rights under the Loan
Documents by or through Administrative Agent, and Lenders and Administrative
Agent may perform any of their duties or exercise any of their Rights under the
Loan Documents by or through their respective officers, directors, employees,
attorneys, agents, or other representatives (collectively, "Representatives").
Administrative Agent, Lenders, and their respective Representatives shall (a) be
entitled to rely upon (and shall be protected in relying upon) any writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telecopy, telegram, telex or teletype message, statement, order or other
documents or conversation believed by any of them to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinion of counsel selected by Administrative Agent or such
Lender, (b) be entitled to deem and treat each Lender as the owner and holder of
its Loan Percentage for all purposes until, subject to Section 10.10, written
notice of the assignment or transfer thereof shall have been given to and
received by Administrative Agent (and, any request, authorization, consent or
approval of any Lender shall be conclusive and binding on each subsequent
holder, assignee, or transferee of such Lender's Loan Percentage or Participant
therein until such notice is given and received), and (c) not be deemed to have
notice of the occurrence of a Default or an Event of Default unless notified
thereof by another Lender or Borrower. Administrative Agent may consult with
legal counsel, independent public accountants, consultants, appraisers and other
experts selected by Administrative Agent, and shall not be liable for any action
taken or omitted to be taken by Administrative Agent in good faith in accordance
with the advice of such counsel, accountants or experts. Any such counsel,
accountants or other experts shall be engaged to represent and render services
to all Lenders as a group unless otherwise specified by Administrative Agent.
SECTION 9.5. Limitation of Administrative Agent's Liability.
(a) Neither Administrative Agent nor any of its
Representatives shall be liable for any action taken or omitted to be taken by
it or them under the Loan Documents in good faith and believed by it or them to
be within the discretion or power conferred upon it or them by the Loan
Documents or be responsible for the consequences of any error of judgment or
negligence, except for gross negligence or willful misconduct, and neither
Administrative Agent nor any of its Representatives has a fiduciary relationship
with any Lender by virtue of the Loan Documents (provided that nothing herein
shall negate the obligation of Administrative Agent to account for funds
received by it for the account of any Lender).
(b) Unless indemnified to its satisfaction against loss, cost,
liability, and expense, Administrative Agent shall not be compelled to do any
act under the Loan Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any suit in
respect of the Loan Documents. If Administrative Agent requests instructions
from the Lenders with respect to any act or action (including, but not limited
to, any failure to act) in connection with any Loan Document, Administrative
Agent shall be entitled (but shall not be required) to refrain (without
incurring any liability to any Person by so refraining) from such act or action
unless and until it has received such instructions. In no event, however, shall
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Administrative Agent or any of its Representatives be required to take any
action which it or they reasonably determine could incur for it or them criminal
or civil liability.
(c) Administrative Agent shall not be responsible in any manner
to any Lender or any participant of a Lender for, and each Lender represents and
warrants that it has not relied upon Administrative Agent in respect of, (i) the
creditworthiness of Borrower or Guarantors and the risks involved to such
Lender, (ii) the effectiveness, enforceability, genuineness, validity, or the
due execution of any Loan Document, (iii) any representation, warranty,
document, certificate, report, or statement made therein or furnished thereunder
or in connection therewith, or (iv) the observation of or compliance with any of
the terms, covenants, or conditions of any Loan Document on the part of Borrower
or any Guarantor. Each Lender jointly and severally agrees to indemnify
Administrative Agent and hold it harmless from and against (but limited to such
Lender's Loan Percentage of) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, reasonable expenses, and
reasonable disbursements of any kind or nature whatsoever (including counsel
fees and disbursements) which may be imposed on, asserted against, or incurred
by Administrative Agent in any way relating to or arising out of the Loan
Documents or any action taken or omitted by Administrative Agent under the Loan
Documents (PROVIDED THAT, ALTHOUGH ADMINISTRATIVE AGENT SHALL HAVE THE RIGHT TO
BE INDEMNIFIED FOR ITS ORDINARY NEGLIGENCE [WHETHER SOLE, CONTRIBUTORY OR
COMPARATIVE], ADMINISTRATIVE AGENT SHALL NOT HAVE THE RIGHT TO BE INDEMNIFIED
HEREUNDER FOR ITS OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT).
SECTION 9.6. Default. Upon the occurrence and continuance of a
Default or an Event of Default, Administrative Agent shall make a recommendation
to Lenders of any actions to be taken and each of the Lenders agrees to promptly
confer in order that Lenders can consider such course of action or any other
actions to be taken for the enforcement of the Rights of Lenders; provided that
Administrative Agent shall be entitled (but not obligated) to proceed to take
any actions necessary in its reasonable judgment to preserve Rights, pending
agreement by Lenders on the course of action to be taken. If the Required
Lenders cannot agree on a course of action to be taken within sixty (60) days
following Administrative Agent's initial recommendation, Administrative Agent
shall thereafter take such action as Administrative Agent deems advisable to
protect the Collateral. Any action directed or approved by the Required Lenders,
including without limitation, any exercise of remedies or initiation of suit or
other legal proceedings, shall be binding upon each Lender. In actions with
respect to any property of Borrower or any Guarantor, Administrative Agent is
acting for the account of each Lender to the extent of each Lender's Loan
Percentage. Any and all agreements to subordinate (whether made heretofore or
hereafter) other indebtedness or obligations of Borrower or any Guarantor to the
Obligations shall be construed as being for the benefit of each Lender to the
extent of its respective Loan Percentage. If Administrative Agent acquires any
security for the Obligations or any guaranty of the Obligations, the same shall
be held for the benefit of each Lender in proportion to such Lender's respective
Loan Percentage.
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Lenders agree, among themselves, that unless otherwise agreed to by
Administrative Agent and the Required Lenders, all monies collected or received
by Administrative Agent in respect of the security of the Credit Facility,
directly or indirectly, shall be applied (a) to any fees owed to Administrative
Agent pursuant to any other agreements between Borrower and Administrative Agent
pertaining to the Credit Facility, to all costs of collection or maintenance of
the Collateral, to repay outstanding Swingline Advances, and then to all fees,
interest or principal of the Credit Facility and Short Term Debt on a pro rata
basis, or as otherwise recommended by Administrative Agent and approved by all
of the Lenders and (b) to the amounts owed to any Lender under any Interest
Hedge Agreement, but only after payment in full of the outstanding principal and
interest and other amounts under the Credit Facility (if Borrower has entered
into an Interest Hedge Agreement with more than one Lender, the amounts
distributed pursuant hereto shall be paid to such Lenders on a pro rata basis
based upon each such Lender's estimated exposure as reasonably determined by
such Lenders).
SECTION 9.7. Lenders' Decision. Lenders agree as among themselves that
any decisions or elections to be made by Lenders (and not Administrative Agent)
under this Agreement and the other Loan Documents shall be made by the Required
Lenders, except in the case, if any, where a specific different number or
percentage of Lenders is expressly required under this Agreement or any other
Loan Documents (use of the terms "Lenders" in any of the Loan Documents, without
an express provision for different voting rights other than as set forth in the
definition of Required Lenders, does not imply that unanimous consent is thereby
required). Administrative Agent may, at its election, request any determination,
vote, consent or approval by Lenders in writing or orally (by telephone or in
person). In addition, if any request by Administrative Agent for Lenders'
determination or approval hereunder is made in writing and such writing contains
written notice to Lenders requesting a response within five Business Days, or
longer, from the date Lenders are deemed to have received notice as herein
provided (and setting forth the actual date of the last day of the Lender reply
period), then Lenders shall use reasonable efforts to reply within the
applicable reply period, provided, that if any such Lender does not reply within
the applicable reply period, such Lender shall be deemed not to have approved of
or consented to or concurred with such recommendation or determination.
SECTION 9.8. Limitation of Liability of Lenders. To the extent
permitted by Law, (a) no Lender nor any participant of a Lender shall incur any
liability to any other Lender or participant of a Lender except for acts or
omissions in bad faith, and (b) neither Administrative Agent nor any Lender or
participant of a Lender shall incur any liability to Borrower or any Guarantor
or any other Person for any act or omission of any other Lender or any
participant.
SECTION 9.9. Relationship of Lenders. Nothing herein shall be construed
as creating a partnership or venture among Administrative Agent and Lenders or
among Lenders.
SECTION 9.10. Debtor-Creditor Relationship. Each Lender has and shall
maintain a direct creditor-debtor relationship with Borrower and will have
direct recourse, singly or in the aggregate, against Borrower, subject to the
terms and conditions of the Loan Documents.
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Notwithstanding the foregoing, any right, remedy, action, omission or waiver
respecting this Agreement, the Notes, and the other Loan Documents shall only be
exercised, made, taken, or permitted by Administrative Agent, acting upon the
direction of the Required Lenders, as the Administrative Agent for all Lenders;
provided, however, that if the Required Lenders have elected and directed
Administrative Agent to institute suit against Borrower or any Guarantor for
payment of any past due amounts under the Notes or any other Obligations for
which Lenders have recourse against Borrower or any Guarantor, or in the event
of any bankruptcy proceedings or other legal proceedings relating to this
Agreement against Borrower or any Guarantor, each Lender shall be entitled, at
its option, to bring or join in such proceedings in its own name.
SECTION 9.11. Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and each of the other Loan Documents to which it is a party or to
which Administrative Agent is a party for its benefit. Each Lender also
acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement or with
respect to the Credit Facility.
SECTION 9.12. Removal of Administrative Agent. Lenders, acting by
written notice to Administrative Agent from and agreed to by all of the Lenders
other than Administrative Agent, may remove for cause the then current
Administrative Agent, as Administrative Agent, and appoint one of the other
Lenders as the successor Administrative Agent; provided, that such successor
Administrative Agent shall, prior to the occurrence of a Default, be subject to
the approval of Borrower which shall not be unreasonably withheld. Upon the
appointment of a successor Administrative Agent, the removed Administrative
Agent and the successor Administrative Agent shall execute such documents as any
Lender may reasonably request to reflect such appointment of a successor
Administrative Agent and shall notify Borrower of such change in the
Administrative Agent. The successor Administrative Agent shall be vested with
all rights, powers and privileges and be bound to all duties, obligations and
responsibilities of Administrative Agent in and under this Agreement and the
other Loan Documents; provided, however, that until such time as Borrower is
notified in writing signed by both the removed and successor Administrative
Agents as to the appointment of the successor Administrative Agent, Borrower
shall be entitled to rely on any decision, approval or other act by the removed
Administrative Agent as binding on Lenders, and may pay to Administrative Agent
any amounts due or owing by Borrower under the Loan Documents.
SECTION 9.13. Resignation by Administrative Agent. An Administrative
Agent's status as Administrative Agent under this Agreement shall automatically
terminate fifteen (15) days after the closing or liquidation of such
Administrative Agent or fifteen (15) days after such Administrative Agent is
adjudicated insolvent. Additionally, Administrative Agent may resign its
position as Administrative Agent at any time by giving at least thirty (30) days
written notice
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 65
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thereof to Borrower and the other Lenders. Upon any such occurrence causing a
termination of Administrative Agent or the delivery of such notice of
resignation from Administrative Agent, the Required Lenders and Borrower shall
select a successor Administrative Agent. If the Required Lenders and Borrower
cannot agree upon the choice of the successor Administrative Agent within ten
(10) days after the occurrence causing a termination in the case of a
termination of Administrative Agent, or ten (10) days prior to the effective
resignation date set forth in Administrative Agent's resignation notice in the
case of a resignation by Administrative Agent, then the Designated Successor
Administrative Agent shall become the successor Administrative Agent. Borrower
shall be entitled to participate in the selection of the replacement
Administrative Agent only prior to the occurrence of a Default. Upon any such
termination or resignation, (a) the successor Administrative Agent shall
automatically be vested with all rights, powers and privileges and be bound to
all duties, obligations and responsibilities of Administrative Agent in and
under this Agreement and the other Loan Documents and shall thereafter be deemed
the "Administrative Agent" for all purposes under the Loan Documents and (b)
such terminating or resigning Administrative Agent shall act only in a custodial
capacity for the holding by it of any funds theretofore received from Borrower
and any such funds shall be held in trust for the benefit of the Lenders or
Borrower, as the case may be. Additionally, upon the successor Administrative
Agent becoming Administrative Agent as provided in this Section 9.13, the
terminating or resigning Administrative Agent and the new Administrative Agent
shall execute such documents as any Lender may reasonably request to reflect
such succession. All costs incurred in connection with the execution of such
documents shall be paid by Lenders in proportion to each Lender's Loan
Percentage.
SECTION 9.14. Sharing of Payments and Setoffs. Each Lender agrees that
if it should receive any amount (whether by voluntary payment, by the exercise
of the right of setoff or banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Loan Documents or otherwise) which is
applicable to the payment of the principal of or interest on the Credit
Facility, of a sum which with respect to the related sum or sums received by the
other Lenders exceeds such Lender's Loan Percentage, then such Lender receiving
such excess payment shall purchase without recourse or warranty from the other
Lenders an interest in the indebtedness of Borrower to such Lenders in such
amount as shall result in a proportional participation by all of the Lenders in
such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
This Section 9.14 shall not impair the right of any Lender to exercise any right
of setoff or counterclaim it may have with respect to any funds in an account
pledged to such Lender to secure only indebtedness other than the Obligations,
and to apply the amount received or subject to such exercise to the payment of
such other indebtedness, it being expressly agreed by all the Lenders, however,
that until the Obligations are paid and satisfied in full, any and all amounts
received by any Lender from offset of any account of Borrower shall be applied
to the Obligations, and not to any other indebtedness of Borrower to such
Lender, except in the case of a certificate of deposit or other designated
account (but in no event any operating account of Borrower) that is specifically
pledged or assigned to a Lender as security for indebtedness other than the
Obligations.
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SECTION 9.15. Non-advancing Lenders. In the event that any Lender shall
fail or refuse to advance its Loan Percentage of any payment or reimbursement by
the Lenders as required hereunder, or of any amount to be funded pursuant to
Section 9.3, when it is obligated to do so, Administrative Agent shall notify
the other Lenders of such failure, and such remaining Lenders, or any of them,
may elect, at their sole option and discretion (without any obligation
whatsoever to do so), to advance such non-advancing Lender's portion, pro rata
in accordance with the proportion that the Loan Percentage of each Lender
electing to make such advance bears to the Loan Percentages of all Lenders
electing to make such advance. Upon making any such advance, and notwithstanding
anything to the contrary expressed or implied herein or in the Notes or any Loan
Document, all subsequent payments made on the Credit Facility or from the
exercise of right of setoff or other remedies under this Agreement or the other
Loan Documents, shall be applied, in the manner described below, only to Lenders
other than the non-advancing Lender (and the non-advancing Lender shall not be
entitled to receive the same), until the amounts advanced by such advancing
Lenders on behalf of the non-advancing Lender (together with the interest earned
thereon pursuant to this Agreement and the Notes), have been repaid in full. As
among Lenders other than the non-advancing Lender, Lenders that advanced funds
on behalf of the non-advancing Lender shall receive the portion the
non-advancing Lender would have been entitled to receive had it advanced
(together with the interest earned thereon pursuant to this Agreement and the
Notes), to be applied pro rata in accordance with the amounts advanced by each
such advancing Lender, until the amounts advanced by such Lenders on behalf of
the non-advancing Lender (together with the interest earned thereon pursuant to
this Agreement and the Notes), have been repaid in full; any Lender that
advanced only on its own behalf based on its Loan Percentage shall be repaid
based on such Loan Percentage. In addition, any Lenders that advance funds on
behalf of a non-advancing Lender pursuant to this Section 9.15 shall have a
claim against such non-advancing Lender for the amounts so advanced and shall be
entitled to all rights and remedies at law or in equity to recover any unpaid
amounts. A non-advancing Lender shall not be entitled to vote on any matters
hereunder or related to the Credit Facility (and its interest shall be excluded
for purposes of determining the requisite percentage or number of Lenders for a
vote) so long as such Lender remains a non-advancing Lender.
SECTION 9.16. Benefit of Lenders. All terms, conditions and agreements
set forth in this Article IX, specifically including, without limitation, the
provisions of Section 9.14 are for the sole and exclusive benefit of Lenders,
and neither Borrower nor any other Person shall be entitled to rely on or seek
the benefit of such provisions; provided, however, that Borrower shall be
entitled to rely on any decision, approval or other act by Administrative Agent
as binding Lenders. The Lenders shall be entitled to amend (whether pursuant to
a separate inter-creditor agreement or otherwise) any of the terms, conditions
or agreements set forth in this Article IX or as to any other matter in the Loan
Documents respecting the required number of the Lenders to approve or disapprove
any matter or to take or refrain from taking any action, without the consent of
Borrower, any Guarantor or any other Person or the execution by Borrower, any
Guarantor or any other Person of any such amendment or inter-creditor agreement.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. Continuing Agreement. This is a continuing Agreement and
all the rights, powers and remedies of Lenders hereunder and all agreements and
obligations of Borrower and Lenders hereunder, shall continue to exist until all
Advances have been paid in full, the commitment of Lenders to make Advances
hereunder has been terminated, all Letters of Credit have been terminated and
all other Obligations have been paid in full.
SECTION 10.2. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telecopy or
similar writing), except for any telephone notices as specifically provided for
herein, may be personally served or sent by telecopier, mail or the express mail
service of the United States Postal Service, Federal Express or other equivalent
overnight or expedited delivery service, and (a) if given by personal service or
telecopier (confirmed by telephone), it shall be deemed to have been given upon
receipt; (b) if sent by telecopier without telephone confirmation, it shall be
deemed to have been given twenty-four (24) hours after being given; (c) if sent
by mail, it shall be deemed to have been given upon the earlier of (i) actual
receipt, or (ii) three (3) Business Days after deposit in a depository of the
United States Postal Service, first class mail, postage prepaid; (d) if sent by
Federal Express, the express mail service of the United States Postal Service or
other equivalent overnight or expedited delivery service, it shall be deemed
given upon the earlier of (i) actual receipt or (ii) twenty-four (24) hours
after delivery to such overnight or expedited delivery service, delivery charges
prepaid, and properly addressed to Borrower or the applicable Lender; provided
that notices to Administrative Agent under Article III and Article IV shall not
be effective until received. For purposes hereof, the address of the parties to
this Agreement shall be as set forth in Schedule I attached hereto. Any party
may, by proper written notice hereunder to the other parties, change the address
to which notices shall thereafter be sent to it. Notwithstanding anything to the
contrary implied or expressed herein, the notice requirements herein (including
the method, timing or deemed giving of any notice) is not intended to and shall
not be deemed to increase the number of days or to modify the method of notice
or to otherwise supplement or affect the requirements for any notice required or
sent pursuant to any Legal Requirement (including, without limitation, any
applicable statutory or law requirement), or otherwise given hereunder, that is
not required under this Agreement or the other Loan Documents. The provisions of
this Section 10.2 shall control over any conflicting contractual notice
provisions contained in the Loan Documents.
SECTION 10.3. No Waivers. No failure or delay by Administrative Agent
or any Lender in exercising any right, power or privilege hereunder or under the
Notes or any other Loan Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or
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privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law or in any of the other Loan
Documents.
SECTION 10.4. Expenses; Documentary Taxes; Indemnification. Borrower,
agrees to pay (a) all expenses of Administrative Agent and the reasonable fees
and disbursements of legal counsel for Administrative Agent and for additional
Lenders, in connection with the negotiation, documentation and closing of the
Credit Facility, and in connection with any waiver or consent hereunder or under
the Loan Documents or any amendment, supplement or replacement of any of the
Loan Documents (provided that the aggregate amount of costs and expenses
incurred by Lenders [other than Administrative Agent] prior to the occurrence of
a Default [including, without limitation, the attorneys' fees and expenses of
such Lenders] which Borrower shall be required to pay hereunder shall not exceed
$20,000.00) (subject, however, to the limitations contained in the definition of
"Obligations" and Section 2.3(e) hereof); and (b) if a Default or an Event of
Default occurs, all out-of-pocket expenses incurred by Administrative Agent or
Lenders, including fees and disbursements of legal counsel in connection with
such Event of Default and collection and other enforcement proceedings resulting
therefrom (including, without limitation, any bankruptcy or other insolvency
proceedings), fees of auditors and consultants incurred in connection therewith
and investigation expenses incurred by Lenders in connection therewith. Borrower
shall indemnify Administrative Agent and each Lender against any Taxes (other
than Taxes on the income of any Lender) imposed by reason of the execution and
delivery of this Agreement or the Notes. Borrower further shall indemnify
Administrative Agent and each Lender and hold Administrative Agent and each
Lender harmless from and against any and all liabilities, losses, damages, costs
and expenses of any kind (including, without limitation, the reasonable fees and
disbursements of counsel for Administrative Agent and Lenders in connection with
any investigative, administrative or judicial proceeding, whether or not
Administrative Agent or Lenders shall be designated a party thereto) which may
be incurred by Administrative Agent or any Lender relating to or arising out of
this Agreement or any actual or proposed use of proceeds of the Notes or the
Letters of Credit; PROVIDED THAT NEITHER ADMINISTRATIVE AGENT NOR ANY LENDER
SHALL HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, IT BEING THE INTENTION HEREBY THAT ADMINISTRATIVE AGENT AND
EACH LENDER SHALL BE INDEMNIFIED FOR THE CONSEQUENCES OF ITS NEGLIGENCE, WHETHER
SOLE, CONTRIBUTORY, OR COMPARATIVE.
SECTION 10.5. Amendments and Waivers; Consent to Deviation. Any
provision of this Agreement, the Notes or the other Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by Borrower and Required Lenders.
SECTION 10.6. Survival. All representations, warranties and covenants
made by each Borrower herein or in any certificate or other instrument delivered
by it or on its behalf under the Loan Documents shall be considered to have been
relied upon by Lenders and shall survive the delivery to Administrative Agent or
Lenders of such Loan Documents or the extension of any of
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the Notes or the issuance of any of the Letters of Credit (or any part thereof),
regardless of any investigation made by or on behalf of Administrative Agent or
any Lender.
SECTION 10.7. Prior Understandings; No Defenses; Release; No Oral
Agreements. This Agreement supersedes all other prior understandings and
agreements, whether written or not, between the parties hereto relating
specifically to the transactions provided for herein. Each Borrower confirms
that there are no existing defenses, claims, counterclaims or rights of offset
against any Lender in connection with the negotiation, preparation, execution,
performance or any other matters related to this Agreement or any of the other
Loan Documents executed as of the date hereof and any of the transactions
contemplated thereby, and Borrower hereby expressly releases and discharges each
Lender, and its officers and representatives, from any and all such claims,
known or unknown. Borrower further confirms that none of the Lenders has made
any agreements with, or commitments or representations to, Borrower (either in
writing or orally) other than as expressly stated herein or in the other Loan
Documents executed as of the date hereof.
THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE OTHER WRITTEN LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
To the fullest extent applicable, Borrower and Lender acknowledges and agrees
that this Agreement and each of the Loan Documents shall be subject to Section
26.02 of the Texas Business and Commerce Code.
SECTION 10.8. Limitation on Interest. It is expressly stipulated and
agreed to be the intent of Borrower and Lenders at all times to comply with the
applicable law governing the maximum rate or amount of interest payable on or in
connection with the Notes, the Advances and the Letters of Credit. If the
applicable law is ever judicially interpreted so as to render usurious any
amount called for under the Notes or under any of the other Loan Documents, or
contracted for, charged, taken, reserved or received with respect to any of the
Advances or the Letters of Credit, or if acceleration of the maturity of the
Notes, any prepayment by Borrower, or any other circumstance whatsoever, results
in any Lender having been paid any interest in excess of that permitted by
applicable law, then it is the express intent of Borrower and Lenders that all
excess amounts theretofore collected by Lenders be credited on the principal
balance of the Notes (or, if the Notes have been or would thereby be paid in
full, refunded to Borrower), and the provisions of the Notes and the other
applicable Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate the maturity of the Notes does
not include the right to accelerate any
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interest which has not otherwise accrued on the date of such acceleration, and
Lenders do not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lenders for the use,
forbearance or detention of the indebtedness evidenced hereby or by the Notes
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment
in full so that the rate or amount of interest on account of such indebtedness
does not exceed the Maximum Lawful Rate or maximum amount of interest permitted
under applicable law. The term "applicable law" as used herein shall mean the
laws of the State of Texas, or any other applicable United States federal law to
the extent that it permits Lenders to contract for, charge, take, reserve or
receive a greater amount of interest than under Texas law. The provisions of
this Section 10.8 shall control all agreements between Borrower and Lenders.
SECTION 10.9. Invalid Provisions. If any provision of the Loan
Documents is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term thereof, such provision shall be fully
severable, the Loan Documents shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part thereof,
and the remaining provisions thereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance therefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of the Loan
Documents a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid and enforceable.
SECTION 10.10. Assignments and Participations. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that
(a) Borrower shall not directly or indirectly, assign or
transfer, or attempt to assign or transfer, any of its rights, duties or
obligations under this Agreement without the express prior written consent of
the Required Lenders;
(b) each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Note, and its Loan Commitment
Amount); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, any such partial assignment
shall be in an amount at least equal to $5,000,000 or an
integral multiple of $500,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights
and obligations under this Agreement and the Note; and
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(iv) the parties to such assignment shall execute
and deliver to the Administrative Agent for its acceptance an
Assignment and Acceptance in the form of Exhibit "C" hereto,
together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor,
Administrative Agent and Borrower shall make appropriate arrangements so that,
if required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 10.20.
(c) Administrative Agent shall maintain at its address on
Schedule I attached hereto a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Loan Commitment Amount of, and principal amount of the
Credit Facility owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and Borrower, Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit
"C" hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Loan Commitment Amount); provided, however,
that (i) such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Article III and the
right of set-off contained in Section 8.3, and (iv) Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of Borrower relating to its Note and
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to approve any amendment, modification, or waiver of any provision of this
Agreement (other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such Note,
extending any scheduled principal payment date or date fixed for the payment of
interest on such Note, or extending its Loan Commitment Amount).
(f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Note to
any Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning Borrower or any
of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to Section 10.19 hereof.
SECTION 10.11. Senior Debt; Borrower Subordination. The indebtedness
of Borrower hereunder and under the Notes and all of the Obligations is intended
to be and shall be senior to any subordinated indebtedness of Borrower secured
by a Lien on any portion of the Collateral (the foregoing shall not in any way
imply Lenders' consent to any such subordinate debt which is not otherwise
permitted by this Agreement). The Notes and any other amounts advanced to or on
behalf of Borrower or any other Person pursuant to the terms of this Agreement
or any other Loan Document, shall never be in a position subordinate to any Debt
of Borrower owing to any other Person, except with the knowledge and written
consent of Lenders.
SECTION 10.12. Revolving Loan. Borrower and Lenders hereby agree that,
except for Section 15.10(b) thereof, the provisions of Art. 5069-15.01 et seq.
of the Revised Civil Statues of Texas, 1925, as amended (regulating certain
revolving credit loans and revolving triparty accounts) shall not govern or in
any manner apply to the Notes, the Letters of Credit or the Loan Documents.
SECTION 10.13. Construction. The parties hereto acknowledge and agree
that neither this Agreement nor any other Loan Document shall be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiations and preparation of this Agreement and the other Loan Documents.
SECTION 10.14. APPLICABLE LAW. THIS AGREEMENT, THE NOTES AND ALL THE
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION
GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE REMEDIES,
RELATED TO ANY PART OF BORROWER'S OR ANY GUARANTOR'S ASSETS OR TO THE EXTENT
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THAT UNITED STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 10.8 OR OTHERWISE.
SECTION 10.15. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(a) Any legal action or proceeding with respect to this
Agreement or the Notes or any document related thereto may be brought in the
courts of the State of Texas or of the United States of America for the Northern
District of Texas, and, by execution and delivery of this Agreement, Borrower
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(b) Borrower irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to Borrower at
its address provided herein.
(c) Nothing contained in this Section 10.16 shall affect the
right of the Administrative Agent, any Lender or any holder of a Note to serve
process in any other manner permitted by Law or commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.
SECTION 10.16. JURY TRIAL WAIVER. BORROWER AND LENDERS EACH HEREBY
WAIVE ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OR RELATING
TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 10.17. Counterparts. This Agreement and all amendments hereto,
and all the other Loan Documents may be executed in any number of original
counterparts, each of which when so executed and delivered shall be an original,
and all of which, collectively, shall constitute one and the same agreement, it
being understood and agreed that the signature pages may be detached from one or
more counterparts and combined with the signature pages from any other
counterpart in order that one or more fully executed originals may be assembled.
SECTION 10.18. Inconsistent Provisions. In the event of any conflict
or inconsistency between the terms of this Agreement and the terms of the other
Loan Documents, the terms of this Agreement shall control.
SECTION 10.19. Confidentiality. The Administrative Agent and the
Lenders will maintain the confidentiality of any non-public information relating
to Borrower or any Guarantor which has been identified in writing as
confidential on the information itself or otherwise (the "Confidential
Information") and, except as provided below, will exercise the same degree of
care
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 74
75
that each of the Administrative Agent and the Lenders exercise with respect to
its own proprietary information to prevent the unauthorized disclosure of the
Confidential Information to third parties. Confidential Information shall not
include information that either: (a) is in the public domain or in the knowledge
or possession of the Administrative Agent or the Lenders when disclosed to the
Administrative Agent or the Lenders, or becomes part of the public domain after
disclosure to the Administrative Agent or the Lenders through no fault of the
Administrative Agent or such Lenders; or (b) is disclosed to the Administrative
Agent or the Lenders by a third party, provided that the Administrative Agent or
the Lenders do not have actual knowledge that such third party is prohibited
from disclosing such information. The terms of this section shall not apply to
disclosure of Confidential Information by the Administrative Agent or the
Lenders that is in their good faith opinion, compelled by laws, regulations,
rules, orders or legal process or proceedings or as disclosed to: (i) any party,
including a prospective participant or assignee, who has signed a
confidentiality agreement containing terms substantially similar to those
contained herein; (ii) legal counsel, examiners, auditors and directors of the
Administrative Agent or the Lenders and examiners, auditors and investigators
having regulatory authority over the Administrative Agent or the Lenders; or
(iii) any party in connection with the exercise of remedies by the
Administrative Agent or the Lenders after the occurrence of an Event of Default.
SECTION 10.20. Taxes. Each Lender that is not a corporation or
partnership created or organized in or under the laws of the United States, any
estate that is subject to federal income taxation regardless of the source of
its income or any trust which is subject to the supervision of a court within
the United States and the control of a United States fiduciary as described in
section 7701 (a) (30) of the Internal Revenue Code (a "Non-U.S. Lender") shall
deliver to Borrower and Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased )
on or before the date on which it becomes a party to this Agreement (or, in the
case of a Participant, on or before the date on which such Participant purchases
the related participation) either:
(a) (x) two duly completed and signed copies of either
Internal Revenue Service Form 1001 (relating to such Non-U.S. Lender and
entitling it to a complete exemption from withholding of U.S. Taxes on all
amounts to be received by such Non-U.S. Lender pursuant to this Agreement and
the other Loan Documents) or Form 4224 (relating to all amounts to be received
by such Non-U.S. Lender pursuant to this Agreement and the other Loan
Documents), or successor and related applicable forms, as the case may be, or
(y) two duly completed and signed copies of Internal Revenue Service Form W-8 or
W-9, or successor and related applicable forms, as the case may be; or
(b) in the case of a Non-U.S. Lender that is not a "bank"
within the meaning of Section 881 (c) (3) (A) of the Code and that does not
comply with the requirements of clause (a) hereof, (x) a statement in a form as
shall be reasonably requested by Borrower from time to time to the effect that
such Non-U.S. Lender is eligible for a complete exemption from
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 75
76
withholding of U.S. Taxes under Code Section 87(b) or 881(c), and (y) two duly
completed and signed copies of Internal Revenue Service Form W-8 or successor
and related applicable forms.
Further, each Non-U.S. Lender agrees to deliver to Borrower and Administrative
Agent, and if applicable, the assigning Lender (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two further duly completed and signed copies of such Forms 1001,
4224, W-8 or W-9, as the case may be, or successor and related applicable forms,
on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to the Borrower (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) in accordance with applicable United States Laws and regulations;
unless, in any such case, any change in Law or regulations has occurred
subsequent to the date such Lender became a party to this Agreement ( or in the
case of a Participant, the date on which such Participant purchased the related
participation) which renders all such forms inapplicable or which would prevent
such Lender (or Participant) from properly completing and executing any such
form with respect to it and such Lender promptly notifies Borrower and
Administrative Agent (or, in the case of a Participant, the Lender from which
the related participation shall have been purchased) if it is no longer able to
deliver, or if it is required to withdraw or cancel, any form or statement
previously delivered by it pursuant to this Section 10.20. A Non-U.S. Lender
shall not be required to deliver any form or statement pursuant to the
immediately preceding sentences in this Section 10.20 that such Non-U.S. Lender
is not legally able to deliver it being understood and agreed that Borrower
shall withhold or deduct such amount from any payments made to such Non-U.S.
Lender that the Borrower reasonably determines are required by law that payments
resulting from a failure to comply with this Section 10.20 shall not be subject
to payment or indemnity by Borrower pursuant to Section 10.4).
SECTION 10.21. Common Enterprise. Borrower and Guarantors are engaged
in the businesses set forth in Section 6.2 of this Agreement. These operations
require financing on a basis such that the credit supplied can be made available
from time to time to Borrower and Guarantors, as required for the continued
successful operation of Borrower and Guarantors. Borrower has requested that
Lenders make the Credit Facility available primarily for the purposes of
financing the operations of Borrower and Guarantors. Borrower and Guarantors
expect to derive benefit (and the boards of directors or other governing body of
Borrower and each Guarantor may reasonably be expected to derive benefit),
directly or indirectly, from the Credit Facility established by Lenders, both in
their separate capacities and as members of the group of companies, since the
successful operation and condition of Borrower and each Guarantor is dependent
on the continued successful performance of the functions of the group as a
whole.
SECTION 10.22. Amendment and Restatement/Renewal and Extension. The
Credit Facility is in renewal and extension of (but does not extinguish) the
Working Capital Facility and this Agreement renews and extends and amends and
restates in its entirety the Original Loan Agreement. Borrower and Guarantors
acknowledge and agree that all liens and security interests
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 76
77
securing the Working Capital Facility are hereby renewed and extended and
continue to secure the Working Capital Facility as renewed and extended and
amended and restated by the Credit Facility.
SECTION 10.23. Compliance Certificate. Notwithstanding anything to the
contrary contained in this Agreement, Borrower shall not be entitled to any
Advances after any payments on the Credit Facility or Short Term Debt with the
proceeds of the Permitted Institutional Debt until Administrative Agent shall
have received a then current Borrower's compliance certificate. Such current
compliance certificate should show all quarterly calculations as of the
immediately preceding quarter even if such quarterly calculations are not then
due pursuant to the terms of this Agreement.
SECTION 10.24. Year 2000 Compliance - Representation, Warranty and
Covenant. Borrower hereby represents and warrants to Administrative Agent and
Lenders that Borrower has (i) initiated a review and assessment of all areas
within its, each of its Subsidiaries' and each of its Affiliates' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by Borrower, any of its Subsidiaries or any of its Affiliates
(or their suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material to
its, any of its Subsidiaries' or any of its Affiliates' business and operations
will on a timely basis be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000 (that is, be "Year 2000 compliant"),
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect. Borrower will promptly notify Administrative
Agent in the event Borrower discovers or determines that any computer
application (including those of its suppliers and vendors) that is material to
its, any of its Subsidiaries' or any of its Affiliates' business and operations
will not be Year 2000 compliant on a timely basis, except to the extent that
such failure could not reasonably be expected to have a Material Adverse Effect.
[REMAINDER OF PAGE INTENTIONALLY BLANK -
SEE SIGNATURES ON FOLLOWING PAGE]
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 77
78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers effective as of the
Effective Date.
BORROWER:
MONARCH DENTAL CORPORATION, a
Delaware corporation
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
formerly NationsBank, N.A.,
a national banking association,
as Administrative Agent for Lenders
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 78
79
LENDERS:
BANK OF AMERICA, N.A.,
formerly NationsBank, N.A.,
a national banking association
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
FLEET NATIONAL BANK,
a national banking association
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "Rabobank Nederland",
New York Branch
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 79
80
CONSENT OF GUARANTORS
Each Guarantor hereby (a) acknowledges its consent to this Agreement and the
changes to the Credit Facility effected hereby, (b) ratifies and confirms all
terms and provisions of its respective Guaranty and the security instruments
relating to the Collateral , (c) agrees that such Guaranty and security
instruments are and shall remain in full force and effect, (d) acknowledges that
there are no claims or offsets against, or defenses or counterclaims to, the
terms and provisions of and the obligations created and evidenced by such
Guaranty or security instruments, (e) reaffirms all agreements and obligations
under such Guaranty and such security instruments with respect to the Credit
Facility, the Notes, this Agreement and all other documents, instruments or
agreements governing, securing or pertaining to the Credit Facility, as the same
may be modified by this Agreement, (f) and acknowledges that the Obligations
described in this Agreement are the guaranteed obligations under such Guaranty
and are the obligations secured by such security instruments and (g) represents
and warrants that all requisite corporate or partnership action necessary for it
to execute this Agreement has been taken.
EXECUTED as of the 30th day of June, 1999.
GUARANTORS:
Managed Dental Care Centers, Inc., a Texas corporation
Monarch Dental Associates (Arkansas), Inc., an Arkansas
corporation (f/k/a United Dental Care, Inc.)
Dental Care One (Monarch), Inc., an Ohio corporation
Midwest Dental Management, Inc., a Wisconsin corporation
Dental Centers of Indiana (Monarch), Inc., an Indiana corporation;
Midwest Dental Care, Mondovi, Inc., a Wisconsin corporation;
Midwest Dental Care, Sheboygan, Inc., a Wisconsin corporation;
Monarch Dental Management, Inc., a Texas corporation;
Three Peaks Dental Management, Inc., a Colorado corporation;
Monarch Dental Associates (Utah), Inc., a Utah corporation
By:
---------------------------------------------------------------
Name:
-------------------------------------------------------------
Title:
------------------------------------------------------------
MacGregor Dental Associates, L.P., a Texas limited partnership
By: Monarch Dental Management, Inc., a Texas
corporation, its general partner
By:
---------------------------------------------------------------
Name:
-------------------------------------------------------------
Title:
------------------------------------------------------------
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 80
81
Monarch Dental Associates, L.P., a
Texas limited partnership
By: Monarch Dental Management,
Inc., a Texas corporation, its
general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Monarch Dental (Press) Associates,
L.P., a Texas limited partnership
By: Monarch Dental Management,
Inc., a Texas corporation, its
general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Monarch Dental Associates
(Midland/Odessa), L.P., a Texas
limited partnership
By: Monarch Dental Management,
Inc., a Texas corporation, its
general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Monarch Dental Associates
(Abilene), L.P., a Texas limited
partnership
By: Monarch Dental Management,
Inc., a Texas corporation,
its general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 81
82
Monarch Dental Associates
(Arizona), L.L.C., an Arizona
limited liability company
By: Monarch Dental Associates
(Utah), Inc., a Utah
corporation, its manager
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Partners Dental Corporation, a
Delaware corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Valley Forge Dental Associates,
Inc., a Delaware corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
VFD of Pennsylvania, Inc., a
Delaware corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Horizon Group International, Inc.,
an Ohio corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 82
83
Precise Dental Lab, Inc., an Ohio
corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
VFD of Georgia, Inc., a Delaware
corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
VFD of Pittsburgh, Inc., a
Pennsylvania corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Pro Dent, Inc., a Pennsylvania
corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
VFD Realty, Inc., a Delaware
corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
SECOND AMENDED AND RESTATED LOAN AGREEMENT (Monarch Dental Corporation) Page 83
84
================================================================================
SECOND AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF
JUNE 30, 1999
AMONG
MONARCH DENTAL CORPORATION
AS "BORROWER"
AND
BANK OF AMERICA, N.A.
AS "ADMINISTRATIVE AGENT", "SOLE LEAD ARRANGER"
AND "SOLE BOOK MANAGER"
AND
BANK OF AMERICA, N.A.
AND THE OTHER ENTITIES DESIGNATED HEREIN
AS "LENDERS"
================================================================================
85
TABLE OF CONTENTS
ARTICLE I
TERMS DEFINED 1
SECTION 1.1. Definitions 1
SECTION 1.2. Singular and Plural of Definitions 20
SECTION 1.3. Substantive Definitions 20
SECTION 1.4. Money 20
SECTION 1.5. Captions; References 20
SECTION 1.6. Accounting Terms and Determinations 21
ARTICLE II
COMMITMENT 21
SECTION 2.1. Credit Facility Commitment 21
SECTION 2.2. Method of Borrowing 22
SECTION 2.3. Fees 25
TERMS OF CREDIT FACILITY 26
SECTION 3.1. Notes 26
SECTION 3.2. Maturity 26
SECTION 3.3. Interest Rate 26
SECTION 3.4. Mandatory Interest and Principal Payments 27
SECTION 3.5. LIBOR Rate Advances 27
SECTION 3.6. Payments of Advances; Reduction of Commitment Amount. 29
SECTION 3.7. Schedules on Notes 30
SECTION 3.8. General Provisions as to Payments 31
SECTION 3.9. Application of Payments 31
SECTION 3.10. Post-Default Interest; Past Due Principal and Interest 31
SECTION 3.11. Computation of Interest and Fees 32
SECTION 3.12. Capital Adequacy 32
SECTION 3.13. Deposit of Cash Collateral 32
SECTION 3.14. Guarantees and Collateral 32
ARTICLE IV
CONDITIONS TO FUNDING 33
SECTION 4.1. Conditions To Initial Advance or Letter of Credit 33
SECTION 4.2. Conditions To All Advances 34
SECTION 4.3. Conditions To Particular Advances 34
SECTION 4.4. Conditions to Letters of Credit 35
SECTION 4.5. Conditions To Advances for Permitted Acquisitions 35
i
86
ARTICLE V
REPRESENTATIONS AND WARRANTIES 37
SECTION 5.1. Existence and Power of Borrower 37
SECTION 5.2. Organization 37
SECTION 5.3. Authorization; Contravention 37
SECTION 5.4. Enforceable Obligations 38
SECTION 5.5. Financial Information 38
SECTION 5.6. Litigation 38
SECTION 5.7. ERISA 38
SECTION 5.8. Taxes and Filing of Tax Returns 39
SECTION 5.9. Ownership or Lease of Assets 39
SECTION 5.10. Business; Compliance 39
SECTION 5.11. Compliance with Law 40
SECTION 5.12. Full Disclosure 40
SECTION 5.13. Environmental Matters 40
SECTION 5.14. Purpose of Credit 40
SECTION 5.15. Governmental Regulations 40
SECTION 5.16. Indebtedness 41
SECTION 5.17. Insurance 41
SECTION 5.18. Solvency 41
SECTION 5.19. Providers Compliance with Dental Practice Laws and Fraud
and Abuse Laws 41
ARTICLE VI
AFFIRMATIVE COVENANTS 41
SECTION 6.1. Information From Borrower 41
SECTION 6.2. Business of Borrower 43
SECTION 6.3. Right of Inspection 44
SECTION 6.4. Maintenance of Insurance 44
SECTION 6.5. Payment of Taxes, Impositions and Claims 44
SECTION 6.6. Compliance with Laws and Documents 45
SECTION 6.7. Environmental Law Compliance and Indemnity 45
SECTION 6.8. Covenant Compliance 46
SECTION 6.9. Quantity and Quality of Documents 46
SECTION 6.10. Additional Documents 46
ARTICLE VII
NEGATIVE COVENANTS 46
SECTION 7.1. Consolidated Funded Debt to Consolidated Capitalization. 46
ii
87
SECTION 7.2. Consolidated Funded Debt to Consolidated EBITDA 47
SECTION 7.3. Coverage Ratio 47
SECTION 7.4. Minimum Consolidated Net Worth 47
SECTION 7.5. Consolidated Senior Funded Debt to Consolidated EBITDA 47
SECTION 7.6. Limitation on Debt 47
SECTION 7.7. Limitation on Sale of Properties 48
SECTION 7.8. Limitations on Liens 48
SECTION 7.9. Consolidations, Mergers, Acquisitions, Sales of Assets,
and Maintenance 49
SECTION 7.10. Investments 49
SECTION 7.11. Distributions 50
SECTION 7.12. Transactions with Affiliates 50
SECTION 7.13. Employee Plans 50
SECTION 7.14. Use Violations 50
SECTION 7.15. Fiscal Year and Accounting Methods 51
SECTION 7.16. Governmental Regulations 51
SECTION 7.17. Changes in Management 51
SECTION 7.18. Repurchase of Stock 51
SECTION 7.19. Capital Expenditures 51
ARTICLE VIII
DEFAULTS AND REMEDIES 51
SECTION 8.1. Events of Default 51
SECTION 8.2. Remedies 53
SECTION 8.3. Rights of Set-Off 54
SECTION 8.4. Remedies Cumulative, Concurrent and Non-Exclusive 55
SECTION 8.5. No Conditions Precedent to Exercise Remedies 55
SECTION 8.6. Release of and Resort to Collateral 55
SECTION 8.7. Waivers 55
SECTION 8.8. Discontinuance of Proceedings 56
SECTION 8.9. Application of Proceeds 56
SECTION 8.10. Power of Attorney 56
ARTICLE IX
Administrative Agent AND THE LENDERS 57
SECTION 9.1. Appointment and Authorization of Administrative Agent 57
SECTION 9.2. Possession of Instruments by Administrative Agent 58
SECTION 9.3. Expenses 58
SECTION 9.4. Delegation of Duties; Reliance; Consultation 58
SECTION 9.5. Limitation of Administrative Agent's Liability 59
SECTION 9.6. Default 60
iii
88
SECTION 9.7. Lenders' Decision 61
SECTION 9.8. Limitation of Liability of Lenders 61
SECTION 9.9. Relationship of Lenders 61
SECTION 9.10. Debtor-Creditor Relationship 61
SECTION 9.11. Credit Decisions 62
SECTION 9.12. Removal of Administrative Agent 62
SECTION 9.13. Resignation by Administrative Agent 62
SECTION 9.14. Sharing of Payments and Setoffs. 63
SECTION 9.15. Non-advancing Lenders. 63
SECTION 9.16. Benefit of Lenders 64
ARTICLE X
MISCELLANEOUS 64
SECTION 10.1. Continuing Agreement 64
SECTION 10.2. Notices 64
SECTION 10.3. No Waivers 65
SECTION 10.4. Expenses; Documentary Taxes; Indemnification 65
SECTION 10.5. Amendments and Waivers; Consent to Deviation 66
SECTION 10.6. Survival 66
SECTION 10.7. Prior Understandings; No Defenses; Release;
No Oral Agreements 66
SECTION 10.8. Limitation on Interest 67
SECTION 10.9. Invalid Provisions 67
SECTION 10.10. Assignments and Participations 67
SECTION 10.11. Senior Debt; Borrower Subordination 69
SECTION 10.12. Revolving Loan 69
SECTION 10.13. Construction 69
SECTION 10.14. APPLICABLE LAW 70
SECTION 10.15. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS 70
SECTION 10.16. JURY TRIAL WAIVER 70
SECTION 10.17. Counterparts 70
SECTION 10.18. Inconsistent Provisions 71
SECTION 10.19. Confidentiality 71
SECTION 10.20. Taxes 71
SECTION 10.21. Common Enterprise 72
SECTION 10.22. Amendment and Restatement/Renewal and Extension 72
SECTION 10.23. Compliance Certificate 73
SECTION 10.24. Year 2000 Compliance - Representation,
Warranty and Covenant 73
iv
89
EXHIBITS
EXHIBIT A-1 NOTE FORM
EXHIBIT A-2 SWINGLINE NOTE
EXHIBIT B - REQUEST FOR ADVANCE
EXHIBIT C - ASSIGNMENT AND ACCEPTANCE
EXHIBIT D - LOC APPLICATION FORM
EXHIBIT E - SHORT TERM DEBT DOCUMENTS
SCHEDULE I - LENDERS
SCHEDULE II - BASE RATE SPREAD; LIBOR MARGIN;
LETTER OF CREDIT FEE PERCENTAGE;
UNUSED FEE PERCENTAGE;
RATE ENHANCEMENT SPREAD
SCHEDULE III - DEBT
SCHEDULE IV - LITIGATION
SCHEDULE V - LIENS AS OF THE CLOSING DATE
SCHEDULE VI ENVIRONMENTAL MATTERS
SCHEDULE VII BORROWER'S SUBSIDIARIES
v
90
Exhibit A-1
AMENDED AND RESTATED PROMISSORY NOTE
$_______________ Dallas, Texas ________________
FOR VALUE RECEIVED, MONARCH DENTAL CORPORATION, a Delaware corporation
("Maker"), hereby promises to pay to the order of ____________________________
("Lender"), at the offices of Lender at____________________, the principal sum
of ___________________ and No/100 Dollars ($___________________) (or the unpaid
balance of all principal advanced against this Note, if that amount is less), on
or before the Termination Date for this Note (as established by the Loan
Agreement), together with interest on the unpaid principal balance of this Note
from day to day outstanding, as hereinafter provided and as provided in the Loan
Agreement.
This Note has been executed and delivered pursuant to the terms of that
certain Second Amended and Restated Loan Agreement (as the same may be further
modified, amended, supplemented, extended or restated from time to time, the
"Loan Agreement") dated as of August __, 1999, executed by and among Maker,
Administrative Agent and the Lenders (which includes the payee of this Note).
This Note is one of the notes defined in the Loan Agreement as a "Note" with the
terms and provisions of the Loan Agreement, related to this Note being
incorporated herein by reference for all purposes. Each capitalized term not
expressly defined herein shall have the meaning given to such term under the
Loan Agreement. The terms of the Loan Agreement shall govern in the case of any
inconsistency between such terms and the terms hereof.
This Note is secured by the Collateral Assignment of Partnership
Interests, the Pledge Agreement, the Security Agreement, the guaranties of the
Guarantors and all the other Loan Documents, and all liens and security
interests created or evidenced thereby. Any holder shall be entitled to all
benefits and remedies and security set forth in the Loan Agreement and all the
other Loan Documents. This Note renews, extends and replaces that certain
Amended and Restated Promissory Note dated ___________in the stated principal
amount of $________________, executed by Maker, payable to the order of Lender.
1. Interest and Payment.
(a) Maturity. The principal of this Note and all accrued but unpaid
interest hereon shall be due and payable in full on the Termination Date as
provided in the Loan Agreement.
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 1
91
(b) Accrual of Interest. Subject to Paragraph 1(f) below, interest
on this Note shall accrue at a rate and on the terms provided in the Loan
Agreement.
(c) Agreements Concerning Pricing Election. Reference should be made
to the provisions of Section 3.5 of the Loan Agreement concerning the terms,
manner and agreements related to the interest rate elections available to Maker
under this Note.
(d) Principal and Interest Payments. Principal and interest hereon
shall be due and payable as is provided in Article III of the Loan Agreement.
(e) Default Rate. After maturity of this Note or during the
continuance of an Event of Default, the outstanding principal balance of this
Note shall, at the option of the Required Lenders, bear interest at the Default
Rate, as provided in the Loan Agreement.
(f) Maximum Lawful Rate Adjustments. If at any time the Applicable
Rate shall be limited to the Maximum Lawful Rate, any subsequent reductions in
the Applicable Rate shall not reduce the rate of interest on this Note below the
Maximum Lawful Rate until the total amount of interest accrued equals the amount
of interest which would have accrued if the Applicable Rate had at all times
been in effect. In the event that at maturity (stated or by acceleration), or at
the final payment of the Credit Facility, the total amount of interest paid or
accrued on the Credit Facility is less than the amount of interest which would
have accrued if the Applicable Rate had at all times been in effect with respect
thereto, then at such time, to the extent permitted by law, Maker shall pay to
Administrative Agent, for the ratable benefit of the Lenders, an amount equal to
the difference between (a) the lesser of the amount of interest which would have
accrued if the Applicable Rate had at all times been in effect and the amount of
interest which would have accrued if the Maximum Lawful Rate had at all times
been in effect, and (b) the amount of interest actually paid on the Credit
Facility.
2. Default. The occurrence of a Default or an Event of Default, under
and as defined in the Loan Agreement, shall constitute, respectively, a Default
or an Event of Default under this Note.
3. Remedies.
(a) All Remedies Available. Upon the occurrence of an Event of
Default, the holder hereof, acting by and through Administrative Agent in
accordance with the terms of Articles VIII and IX of the Loan Agreement, shall
have the right to declare the entire unpaid principal balance of, and all
accrued unpaid interest on, this Note at once due and payable (and upon such
declaration, the same shall be at once due and payable), to foreclose any and
all liens and security interests securing payment hereof, to offset against this
Note any sum or sums owed
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 2
92
by it to Maker, and to exercise any of its other rights, powers and remedies
under this Note, under the Loan Agreement or any other Loan Document, or at law
or in equity.
(b) No Waiver. Neither the failure by the holder hereof to exercise,
nor delay by the holder hereof in exercising, the right to accelerate the
maturity of this Note or any other right, power or remedy upon any Default or
Event of Default shall be construed as a waiver of such Default or Event of
Default or as a waiver of the right to exercise any such right, power or remedy
at any time. No single or partial exercise by the holder hereof of any right,
power or remedy shall exhaust the same or shall preclude any other or further
exercise thereof, and every such right, power or remedy may be exercised at any
time and from time to time. All rights and remedies provided for in this Note
and in any other Loan Document are cumulative of each other and of any and all
other rights and remedies existing at law or in equity, and the holder hereof
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and remedies
as may now or hereafter exist at law or in equity for the collection of the
indebtedness owing hereunder, and the resort to any right or remedy provided for
hereunder or under any such other Loan Document or provided for by law or in
equity shall not prevent the concurrent or subsequent employment of any other
appropriate rights or remedies. Without limiting the generality of the foregoing
provisions, the acceptance by the holder hereof from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the rights of the holder hereof
to accelerate the maturity of this Note or to exercise any other right, power or
remedy at the time or at any subsequent time, or nullify any prior exercise of
any such right, power or remedy, or (ii) constitute a waiver of the requirement
of punctual payment and performance, or a novation in any respect.
4. Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or in any
other Loan Documents, expressed or implied, to the contrary, in no event shall
any interest rate charged hereunder or under any of the other Loan Documents, or
any interest contracted for, collected or received by Lender or any holder
hereof, exceed the Maximum Lawful Rate.
(b) Intent of Parties. It is expressly stipulated and agreed to be
the intent of Maker and Lender at all times to comply with the applicable law
governing the maximum rate or amount of interest payable on or in connection
with this Note. If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under this Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved or received with
respect to this Note, or if acceleration of the maturity of this Note, any
prepayment by Maker, or any other circumstance whatsoever, results in Lender
having been paid any interest in excess of that permitted by applicable law,
then it is the express intent of Maker and Lender that all excess amounts
theretofore collected by Lender be credited on the principal balance of this
Note (or, if
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 3
93
this Note has been or would thereby be paid in full, refunded to Maker), and the
provisions of this Note and the other applicable Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. The right to accelerate
the maturity of this Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Lender
does not intend to collect any unearned interest in the event of acceleration.
All sums paid or agreed to be paid to Lender for the use, forbearance or
detention of the indebtedness evidenced hereby or by any other Loan Document
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment
in full so that the rate or amount of interest on account of such indebtedness
does not exceed the Maximum Lawful Rate. The term "applicable law" as used
herein shall mean the laws of the State of Texas, or any applicable United
States federal law to the extent that it permits Lender to contract for, charge,
take, reserve or receive a greater amount of interest than under Texas law. The
provisions of this paragraph shall control all agreements between Maker and
Lender.
5. General Provisions.
(a) Business Days. Whenever any payment shall be due under this Note
on a day which is not a Business Day, the date on which such payment is due
shall be extended to the next succeeding Business Day, and such extension of
time shall be included in the computation of the amount of interest then
payable.
(b) Manner of Payment. The manner in which payments are to be made
on this Note shall be governed by the provisions hereof and the Loan Agreement,
including, without limitation, Article III of the Loan Agreement.
(c) Prepayments. Prepayments may be made, and as provided in Section
3.6 of the Loan Agreement are required to be made, on this Note subject to and
in accordance with Section 3.6 of the Loan Agreement.
(d) Application of Payments. All payments made on this Note shall be
applied in accordance with Sections 3.6, 3.9 and 8.9 of the Loan Agreement, as
applicable. Nothing herein shall limit or impair any rights of any holder hereof
to apply as provided in the Loan Documents any past due payments, any proceeds
from the disposition of any collateral by foreclosure or other collections after
default.
(e) Costs of Collection. If any holder of this Note retains an
attorney in connection with any default or at maturity or to collect, enforce or
defend this Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any holder of
this Note in connection with this Note or any other Loan Document and does not
prevail, then Maker agrees to pay to each such holder, in addition to
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 4
94
principal and interest, all costs and expenses incurred by such holder in trying
to collect this Note or in any such suit or proceeding, including reasonable
attorneys' fees as and to the extent provided in the Loan Agreement.
(f) Waivers and Acknowledgments. Maker and all sureties, endorsers,
guarantors and any other party now or hereafter liable for the payment of this
Note in whole or in part, hereby severally (i) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notice
(except only for any notice that is specifically required by the terms of the
Loan Agreement or any other Loan Document), filing of suit and diligence in
collecting this Note or enforcing any of the security herefor; (ii) agree to any
substitution, subordination, exchange or release of any such security or the
release of any party primarily or secondarily liable hereon; (iii) agree that
the holder hereof shall not be required first to institute suit or exhaust its
remedies against Maker or others liable or to become liable hereon or to enforce
its rights against them or any security herefor; (iv) consent to any extension
or postponement of time of payment of this Note for any period or periods of
time and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (v)
submit (and waive all rights to object) to personal jurisdiction in the State of
Texas, and venue in Dallas County, Texas, for the enforcement of any and all
obligations under the Loan Documents.
(g) Amendments in Writing. This Note may not be changed, amended or
modified except in a writing expressly intended for such purpose and executed by
the party against whom enforcement of the change, amendment or modification is
sought.
(h) Purpose of Proceeds. The proceeds of this Note will be used
solely for business purposes and not for personal, family, household or
agricultural purposes.
(i) Notices. Any notice required or which any party desires to give
under this Note shall be given and effective as provided in Section 10.2 of the
Loan Agreement.
(j) Assignments/Participations. Maker acknowledges and agrees that
the holder of this Note may, at any time and from time to time, assign all or a
portion of its interest in the Credit Facility or transfer to any Person a
participation interest in the Credit Facility, subject to and in accordance with
the terms and conditions of the Loan Agreement, including Section 10.10 thereof.
(k) Successors and Assigns. All of the covenants, stipulations,
promises and agreements contained in this Note by or on behalf of Maker shall
bind its successors and assigns and shall be for the benefit of Lender and any
holder hereof, and their successors and assigns, as and to the extent provided
in the Loan Agreement.
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 5
95
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE
REMEDIES RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT UNITED
STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 10.8 OF THE LOAN AGREEMENT OR
OTHERWISE.
(m) Time of the Essence. Time shall be of the essence in this Note
with respect to all of Maker's obligations hereunder.
(n) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 6
96
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKER:
MONARCH DENTAL CORPORATION,
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
AMENDED AND RESTATED PROMISSORY NOTE (MONARCH DENTAL CORPORATION) PAGE 7
97
Exhibit A-2
SWINGLINE NOTE
$2,000,000 Dallas, Texas September __, 1999
FOR VALUE RECEIVED, MONARCH DENTAL CORPORATION, a Delaware corporation
("Maker"), hereby promises to pay to the order of Bank of America, N.A.
("Swingline Lender"), at the offices of Swingline Lender at 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxx, 00000 (Attention: Healthcare Banking Group - 0xx Xxxxx), the
principal sum of Two Million and No/100 Dollars ($2,000,000) (or the unpaid
balance of all principal advanced against this Note, if that amount is less), on
or before the Termination Date for this Note (as established by the Loan
Agreement), together with interest on the unpaid principal balance of this Note
from day to day outstanding, as hereinafter provided and as provided in the Loan
Agreement.
This Note has been executed and delivered pursuant to the terms of that
certain Second Amended and Restated Loan Agreement (as the same may be further
modified, amended, supplemented, extended or restated from time to time, the
"Loan Agreement") executed by and among Maker, Administrative Agent and the
Lenders (which includes the payee of this Note). This Note is the "Swingline
Note" defined in the Loan Agreement, with the terms and provisions of the Loan
Agreement, related to this Note being incorporated herein by reference for all
purposes. Each capitalized term not expressly defined herein shall have the
meaning given to such term under the Loan Agreement. The terms of the Loan
Agreement shall govern in the case of any inconsistency between such terms and
the terms hereof.
This Note is secured by the Collateral Assignment of Partnership
Interests, the Pledge Agreement, the Security Agreement, the guaranties of the
Guarantors and all the other Loan Documents, and all liens and security
interests created or evidenced thereby. Any holder shall be entitled to all
benefits and remedies and security set forth in the Loan Agreement and all the
other Loan Documents.
1. Interest and Payment.
(a) Maturity. The principal of this Note and all accrued but unpaid
interest hereon shall be due and payable in full on the Termination Date as
provided in the Loan Agreement.
(b) Accrual of Interest. Subject to Paragraph 1(f) below, interest
on this Note shall accrue at a rate and on the terms provided in the Loan
Agreement.
SWINGLINE NOTE (MONARCH DENTAL CORPORATION) PAGE 1
98
(c) Agreements Concerning Pricing Election. Reference should be made
to the provisions of Section 3.5 of the Loan Agreement concerning the terms,
manner and agreements related to the interest rate elections available to Maker
under this Note.
(d) Principal and Interest Payments. Principal and interest hereon
shall be due and payable as is provided in Article III of the Loan Agreement.
(e) Default Rate. After maturity of this Note or during the
continuance of an Event of Default, the outstanding principal balance of this
Note shall, at the option of the Swingline Lender, bear interest at the Default
Rate, as provided in the Loan Agreement.
(f) Maximum Lawful Rate Adjustments. If at any time the Applicable
Rate shall be limited to the Maximum Lawful Rate, any subsequent reductions in
the Applicable Rate shall not reduce the rate of interest on this Note below the
Maximum Lawful Rate until the total amount of interest accrued equals the amount
of interest which would have accrued if the Applicable Rate had at all times
been in effect. In the event that at maturity (stated or by acceleration), or at
the final payment of the Credit Facility, the total amount of interest paid or
accrued on the Credit Facility is less than the amount of interest which would
have accrued if the Applicable Rate had at all times been in effect with respect
thereto, then at such time, to the extent permitted by law, Maker shall pay to
Swingline Lender, an amount equal to the difference between (a) the lesser of
the amount of interest which would have accrued if the Applicable Rate had at
all times been in effect and the amount of interest which would have accrued if
the Maximum Lawful Rate had at all times been in effect, and (b) the amount of
interest actually paid on the Swingline Advances.
2. Default. The occurrence of a Default or an Event of Default, under
and as defined in the Loan Agreement, shall constitute, respectively, a Default
or an Event of Default under this Note.
3. Remedies.
(a) All Remedies Available. Upon the occurrence of an Event of
Default, the holder hereof, acting by and through Administrative Agent in
accordance with the terms of Articles VIII and IX of the Loan Agreement, shall
have the right to declare the entire unpaid principal balance of, and all
accrued unpaid interest on, this Note at once due and payable (and upon such
declaration, the same shall be at once due and payable), to foreclose any and
all liens and security interests securing payment hereof, to offset against this
Note any sum or sums owed by it to Maker, and to exercise any of its other
rights, powers and remedies under this Note, under the Loan Agreement or any
other Loan Document, or at law or in equity.
(b) No Waiver. Neither the failure by the holder hereof to exercise,
nor delay by the holder hereof in exercising, the right to accelerate the
maturity of this Note or any other right, power or remedy upon any Default or
Event of Default shall be construed as a waiver of
SWINGLINE NOTE (MONARCH DENTAL CORPORATION) PAGE 2
99
such Default or Event of Default or as a waiver of the right to exercise any
such right, power or remedy at any time. No single or partial exercise by the
holder hereof of any right, power or remedy shall exhaust the same or shall
preclude any other or further exercise thereof, and every such right, power or
remedy may be exercised at any time and from time to time. All rights and
remedies provided for in this Note and in any other Loan Document are cumulative
of each other and of any and all other rights and remedies existing at law or in
equity, and the holder hereof shall, in addition to the rights and remedies
provided herein or in any other Loan Document, be entitled to avail itself of
all such other rights and remedies as may now or hereafter exist at law or in
equity for the collection of the indebtedness owing hereunder, and the resort to
any right or remedy provided for hereunder or under any such other Loan Document
or provided for by law or in equity shall not prevent the concurrent or
subsequent employment of any other appropriate rights or remedies. Without
limiting the generality of the foregoing provisions, the acceptance by the
holder hereof from time to time of any payment under this Note which is past due
or which is less than the payment in full of all amounts due and payable at the
time of such payment, shall not (i) constitute a waiver of or impair or
extinguish the rights of the holder hereof to accelerate the maturity of this
Note or to exercise any other right, power or remedy at the time or at any
subsequent time, or nullify any prior exercise of any such right, power or
remedy, or (ii) constitute a waiver of the requirement of punctual payment and
performance, or a novation in any respect.
4. Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or in any
other Loan Documents, expressed or implied, to the contrary, in no event shall
any interest rate charged hereunder or under any of the other Loan Documents, or
any interest contracted for, collected or received by Swingline Lender or any
holder hereof, exceed the Maximum Lawful Rate.
(b) Intent of Parties. It is expressly stipulated and agreed to be
the intent of Maker and Swingline Lender at all times to comply with the
applicable law governing the maximum rate or amount of interest payable on or in
connection with this Note. If the applicable law is ever judicially interpreted
so as to render usurious any amount called for under this Note or under any of
the other Loan Documents, or contracted for, charged, taken, reserved or
received with respect to this Note, or if acceleration of the maturity of this
Note, any prepayment by Maker, or any other circumstance whatsoever, results in
Swingline Lender having been paid any interest in excess of that permitted by
applicable law, then it is the express intent of Maker and Swingline Lender that
all excess amounts theretofore collected by Swingline Lender be credited on the
principal balance of this Note (or, if this Note has been or would thereby be
paid in full, refunded to Maker), and the provisions of this Note and the other
applicable Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder. The right to accelerate the maturity of this Note does
not
SWINGLINE NOTE (MONARCH DENTAL CORPORATION) PAGE 3
100
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Swingline Lender does not intend to collect
any unearned interest in the event of acceleration. All sums paid or agreed to
be paid to Swingline Lender for the use, forbearance or detention of the
indebtedness evidenced hereby or by any other Loan Document shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does not exceed the
Maximum Lawful Rate. The term "applicable law" as used herein shall mean the
laws of the State of Texas, or any applicable United States federal law to the
extent that it permits Swingline Lender to contract for, charge, take, reserve
or receive a greater amount of interest than under Texas law. The provisions of
this paragraph shall control all agreements between Maker and Swingline Lender.
5. General Provisions.
(a) Business Days. Whenever any payment shall be due under this Note
on a day which is not a Business Day, the date on which such payment is due
shall be extended to the next succeeding Business Day, and such extension of
time shall be included in the computation of the amount of interest then
payable.
(b) Manner of Payment. The manner in which payments are to be made
on this Note shall be governed by the provisions hereof and the Loan Agreement,
including, without limitation, Article III of the Loan Agreement.
(c) Prepayments. Prepayments may be made, and as provided in Section
3.6 of the Loan Agreement are required to be made, on this Note subject to and
in accordance with Section 3.6 of the Loan Agreement.
(d) Application of Payments. All payments made on this Note shall be
applied in accordance with Sections 3.6, 3.9 and 8.9 of the Loan Agreement, as
applicable. Nothing herein shall limit or impair any rights of any holder hereof
to apply as provided in the Loan Documents any past due payments, any proceeds
from the disposition of any collateral by foreclosure or other collections after
default.
(e) Costs of Collection. If any holder of this Note retains an
attorney in connection with any default or at maturity or to collect, enforce or
defend this Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any holder of
this Note in connection with this Note or any other Loan Document and does not
prevail, then Maker agrees to pay to each such holder, in addition to principal
and interest, all costs and expenses incurred by such holder in trying to
collect this Note or in any such suit or proceeding, including reasonable
attorneys' fees as and to the extent provided in the Loan Agreement.
SWINGLINE NOTE (MONARCH DENTAL CORPORATION) PAGE 4
101
(f) Waivers and Acknowledgments. Maker and all sureties, endorsers,
guarantors and any other party now or hereafter liable for the payment of this
Note in whole or in part, hereby severally (i) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notice
(except only for any notice that is specifically required by the terms of the
Loan Agreement or any other Loan Document), filing of suit and diligence in
collecting this Note or enforcing any of the security herefor; (ii) agree to any
substitution, subordination, exchange or release of any such security or the
release of any party primarily or secondarily liable hereon; (iii) agree that
the holder hereof shall not be required first to institute suit or exhaust its
remedies against Maker or others liable or to become liable hereon or to enforce
its rights against them or any security herefor; (iv) consent to any extension
or postponement of time of payment of this Note for any period or periods of
time and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (v)
submit (and waive all rights to object) to personal jurisdiction in the State of
Texas, and venue in Dallas County, Texas, for the enforcement of any and all
obligations under the Loan Documents.
(g) Amendments in Writing. This Note may not be changed, amended or
modified except in a writing expressly intended for such purpose and executed by
the party against whom enforcement of the change, amendment or modification is
sought.
(h) Purpose of Proceeds. The proceeds of this Note will be used
solely for business purposes and not for personal, family, household or
agricultural purposes.
(i) Notices. Any notice required or which any party desires to give
under this Note shall be given and effective as provided in Section 10.2 of the
Loan Agreement.
(j) Assignments/Participations. Maker acknowledges and agrees that
the holder of this Note may, at any time and from time to time, assign all or a
portion of its interest in the Credit Facility or transfer to any Person a
participation interest in the Credit Facility, subject to and in accordance with
the terms and conditions of the Loan Agreement, including Section 10.10 thereof.
(k) Successors and Assigns. All of the covenants, stipulations,
promises and agreements contained in this Note by or on behalf of Maker shall
bind its successors and assigns and shall be for the benefit of Swingline Lender
and any holder hereof, and their successors and assigns, as and to the extent
provided in the Loan Agreement.
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE
REMEDIES RELATED TO ANY PART OF THE COLLATERAL, OR TO THE
SWINGLINE NOTE (MONARCH DENTAL CORPORATION) PAGE 5
102
EXTENT THAT UNITED STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 10.8 OF THE
LOAN AGREEMENT OR OTHERWISE.
(m) Time of the Essence. Time shall be of the essence in this Note
with respect to all of Maker's obligations hereunder.
(n) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKER:
MONARCH DENTAL CORPORATION,
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SWINGLINE NOTE (MONARCH DENTAL CORPORATION) PAGE 6
103
Schedule 1
PARTIES TO LOAN AGREEMENT AND NOTICE ADDRESSES
I. BORROWER
MONARCH DENTAL CORPORATION
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
II. ADMINISTRATIVE AGENT AND LENDERS
A. ADMINISTRATIVE AGENT:
Bank of America, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx XxXxxxxxx
B. LENDERS:
Bank of America, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx XxXxxxxxx
(000) 000-0000 phone
(000) 000-0000 fax
Fleet National Bank
One Federal Street, Mail Stop: MA XX X00X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxxxxx
(000) 000-0000 phone
(000) 000-0000 fax
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A. "Rabobank
Nederland", New York branch
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Corporate Services
(000) 000-0000 phone
(000) 000-0000 fax
SCHEDULE 1 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
104
With a copy to:
Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A. "Rabobank
Nederland", New York branch
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx Xxxxxx
(000) 000-0000 phone
(000) 000-0000 fax
Lender Amount Percentage
------ ----- ----------
1. Bank of America, N.A. 30,000,000.00 40%
2. Fleet National Bank 22,500,000.00 30%
3. "Rabobank Nederland", New York Branch 22,500,000.00 30%
=============== ====
Totals $ 75,000,000.00 100%
SCHEDULE 1 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 2
105
Exhibit D
FORM OF LOC Application
(See following pages)
EXHIBIT D TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
106
Schedule II
========================================================================================================
If Borrower's Consolidated Letter of
Funded Debt to Consolidated Base Rate LIBOR Credit Fee Unused
EBITDA Ratio is: Spread Margin Percentage Fee
Greater than or equal to 3.50 to
1.00, but less than 4.00 to 1.00 1.25% 3.00% 3.00% 0.50%
Greater than or equal to 3.00 to
1.00, but less than 3.50 to 1.00 0.75% 2.50% 2.50% 0.50%
Greater than or equal to 2.50 to
1.00, but less than 3.00 to 1.00 0.50% 2.25% 2.25% 0.375%
Greater than or equal to 2.00 to
1.00, but less than 2.50 to 1.00 0.50% 2.00% 2.00% 0.375%
Greater than or equal to 1.50 to
1.00, but less than 2.00 to 1.00 0.50% 1.50% 1.50% 0.25%
Greater than or equal to 1.00 to
1.00, but less than 1.50 to 1.00 0.25% 1.25% 1.25% 0.25%
Greater than or equal to 0.50 to
1.00, but less than 1.00 to 1.00 0.00% 1.00% 1.00% 0.20%
Less than 0.50 to 1.00 0.00% 0.75% 0.75% 0.20%
========================================================================================================
Rate Enhancement Spread
========================================================================================================
If Borrower's Hypothetical Fixed Charge
Coverage Ratio is: Rate Enhancement Spread
Greater than 1.25 to 1.00 0.00%
Less than or equal to 1.25 to 1.00 0.25%
========================================================================================================
EXHIBIT D TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 2
107
Schedule III
Debt
Please provide.
SCHEDULE III TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
108
Schedule IV
Litigation
Please provide.
SCHEDULE IV TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
109
Schedule V
Liens
Please provide.
SCHEDULE V TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
110
Schedule VI
Environmental Matters
Please provide.
SCHEDULE VI TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
111
Section VII
1. Managed Dental Care Centers, Inc., a Texas corporation
2. Monarch Dental Associates (Arkansas), Inc., an Arkansas corporation
(f/k/a United Dental Care, Inc.)
3. Dental Care One (Monarch), Inc., an Ohio corporation
4. Midwest Dental Management, Inc., a Wisconsin corporation
5. Dental Centers of Indiana (Monarch), Inc., an Indiana corporation
6. Midwest Dental Care, Mondovi, Inc., a Wisconsin corporation
7. Midwest Dental Care, Sheboygan, Inc., a Wisconsin corporation
8. Monarch Dental Management, Inc., a Texas corporation
9. Three Peaks Dental Management, Inc., a Colorado corporation
10 Partners Dental Corporation, a Delaware corporation
11. MacGregor Dental Associates, L.P., a Texas limited partnership
12 Monarch Dental Associates, L.P., a Texas limited partnership
13. Monarch Dental (Press) Associates, L.P., a Texas limited partnership
14. Monarch Dental Associates (Midland/Odessa), L.P., a Texas limited
partnership
15. Monarch Dental Associates (Abilene), L.P., a Texas limited
partnership
16. Monarch Dental Associates (Utah), Inc., a Utah corporation
17. Monarch Dental Associates (Arizona), L.L.C., an Arizona limited
liability company
18. Valley Forge Dental Associates, a Delaware corporation
19. VFD of Pennsylvania, Inc., a Delaware corporation
20. Horizon Group International, Inc., an Ohio corporation
21. Precise Dental Lab, Inc., an Ohio corporation
22. VFD of Georgia, Inc., a Delaware corporation
23. VFD of Pittsburgh, Inc., a Pennsylvania corporation
24. Pro Dent, Inc., a Pennsylvania corporation
25. VFD Realty, Inc., a Delaware corporation
SCHEDULE VII TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
(MONARCH DENTAL CORPORATION) PAGE 1
