EXHIBIT 10.11
$125,000,000
CREDIT AGREEMENT
among
ORTHODONTIC CENTERS OF AMERICA, INC.
as Borrower,
AND
CERTAIN DOMESTIC SUBSIDIARIES OF THE BORROWER,
as Guarantors,
AND
THE LENDERS IDENTIFIED HEREIN,
AND
BANK OF AMERICA, N.A.,
as Administrative Agent,
AND
BANK ONE, NA,
as Syndication Agent,
AND
U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agent
DATED AS OF JANUARY 2, 0000
XXXX XX XXXXXXX SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS...........................................1
1.1 Definitions...........................................................1
1.2 Computation of Time Periods and Other Definitional Provisions........21
1.3 Accounting Terms/Calculation of Financial Covenants..................21
1.4 Time.................................................................21
1.5 Rounding of Financial Covenants......................................21
1.6 References to Agreements and Requirement of Laws.....................22
SECTION 2 CREDIT FACILITY...........................................................22
2.1 Revolving Loans......................................................22
2.2 Letter of Credit Subfacility.........................................23
2.3 Term Loans...........................................................29
2.4 Continuations and Conversions........................................30
2.5 Minimum Amounts......................................................30
2.6 Alternative Rate.....................................................30
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS....................................31
3.1 Interest.............................................................31
3.2 Payments Generally...................................................32
3.3 Prepayments..........................................................33
3.4 Fees.................................................................34
3.5 Payment in full at Maturity..........................................34
3.6 Computations of Interest and Fees....................................34
3.7 Pro Rata Treatment...................................................35
3.8 Sharing of Payments..................................................36
3.9 Capital Adequacy.....................................................36
3.10 Eurodollar Provisions................................................36
3.11 Illegality...........................................................37
3.12 Requirements of Law; Reserves on Eurodollar Loans....................37
3.13 Taxes................................................................37
3.14 Compensation / Alternative Rate Breakage Amount......................40
3.15 Determination and Survival of Provisions.............................40
SECTION 4 GUARANTY..................................................................41
4.1 Guaranty of Payment..................................................41
4.2 Obligations Unconditional............................................41
4.3 Modifications........................................................42
4.4 Waiver of Rights.....................................................42
4.5 Reinstatement........................................................42
4.6 Remedies.............................................................42
4.7 Limitation of Guaranty...............................................43
4.8 Rights of Contribution...............................................43
SECTION 5 CONDITIONS PRECEDENT......................................................43
5.1 Closing Conditions...................................................43
5.2 Conditions to All Extensions of Credit...............................45
SECTION 6 REPRESENTATIONS AND WARRANTIES............................................46
6.1 Corporate Organization and Power.....................................46
6.2 Authorization; Enforceability........................................46
6.3 No Violation.........................................................46
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6.4 Governmental and Third-Party Authorization; Permits...............47
6.5 Litigation........................................................47
6.6 Taxes.............................................................48
6.7 Subsidiaries......................................................48
6.8 Full Disclosure...................................................48
6.9 Margin Regulations................................................48
6.10 No Material Adverse Change........................................48
6.11 Financial Matters.................................................49
6.12 Ownership of Properties...........................................49
6.13 ERISA.............................................................49
6.14 Environmental Matters.............................................50
6.15 Compliance With Requirements of Laws; HIPAA.......................51
6.16 Regulated Industries..............................................51
6.17 Insurance.........................................................51
6.18 Material Contracts................................................51
6.19 Labor Relations...................................................52
6.20 Service Agreements................................................52
6.21 Reimbursement.....................................................52
6.22 Fraud and Abuse...................................................52
6.23 Use of Proceeds...................................................53
SECTION 7 AFFIRMATIVE COVENANTS..................................................53
7.1 Financial Statements..............................................53
7.2 Other Business and Financial Information..........................54
7.3 Corporate Existence; Franchises; Maintenance of Properties........57
7.4 Compliance with Requirement of Laws/Compliance Program............57
7.5 Payment of Obligations............................................57
7.6 Insurance.........................................................57
7.7 Maintenance of Books and Records; Inspection......................57
7.8 Affiliated Practices..............................................58
7.9 Permitted Acquisitions............................................58
7.10 Creation or Acquisition of Subsidiaries...........................59
7.11 Use of Proceeds...................................................60
7.12 Further Assurances................................................60
7.13 De Minimis Subsidiaries...........................................60
SECTION 8 NEGATIVE COVENANTS.....................................................61
8.1 Merger; Consolidation.............................................61
8.2 Indebtedness......................................................61
8.3 Liens.............................................................63
8.4 Disposition of Assets.............................................64
8.5 Investments.......................................................65
8.6 Restricted Payments...............................................66
8.7 Transactions with Affiliates......................................66
8.8 Lines of Business.................................................67
8.9 Certain Amendments................................................67
8.10 Limitation on Certain Restrictions................................67
8.11 No Other Negative Pledges.........................................67
8.12 Fiscal Year.......................................................67
8.13 Accounting Changes................................................67
8.14 Financial Covenants...............................................67
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SECTION 9 EVENTS OF DEFAULT.......................................................68
9.1 Event of Default...................................................68
9.2 Acceleration; Remedies.............................................70
9.3 Allocation of Payments After Event of Default......................71
SECTION 10 AGENCY PROVISIONS......................................................72
10.1 Appointment and Authorization of Agents............................72
10.2 Delegation of Duties...............................................72
10.3 Liability of Agents................................................73
10.4 Reliance by Agents.................................................73
10.5 Notice of Default..................................................73
10.6 Credit Decision; Disclosure of Information by Agents...............73
10.7 Indemnification of Agents..........................................74
10.8 Agents in their Individual Capacity................................74
10.9 Successor Agent....................................................75
10.10 Administrative Agent May File Proofs of Claim......................75
10.11 Collateral and Guaranty Matters....................................76
10.12 Other Agents; Arrangers and Managers...............................76
SECTION 11 MISCELLANEOUS..........................................................76
11.1 Notices and Other Communications; Facsimile Copies.................76
11.2 Right of Set-Off...................................................77
11.3 Successors and Assigns.............................................78
11.4 No Waiver; Remedies Cumulative.....................................80
11.5 Attorney Costs, Expenses, Taxes and Indemnification by Credit
Parties............................................................81
11.6 Amendments, Waivers and Consents...................................82
11.7 Counterparts.......................................................83
11.8 Headings...........................................................83
11.9 Survival of Indemnification and Representations and Warranties.....83
11.10 Governing Law; Venue; Jurisdiction.................................83
11.11 Waiver of Jury Trial; Waiver of Consequential Damages..............84
11.12 Severability.......................................................84
11.13 Further Assurances.................................................84
11.14 Confidentiality....................................................84
11.15 Entirety...........................................................84
11.16 Binding Effect; Continuing Agreement...............................84
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SCHEDULES
Schedule 1.1(a) Pro Rata Shares
Schedule 1.1(b) Existing Letters of Credit
Schedule 1.1(c) Litigating ORAL Affiliated Practices
Schedule 6.6 Taxes
Schedule 6.7 Subsidiaries
Schedule 6.17 Self-Insurance Coverage
Schedule 6.18 Material Contracts
Schedule 8.2 Indebtedness
Schedule 8.3 Liens
Schedule 8.5 Investments
Schedule 8.7 Transactions with Affiliates
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Term Note
Exhibit 2.4 Form of Notice of Continuation/Conversion
Exhibit 2.6 Form of Request for Alternative Rate
Exhibit 7.2(a) Form of Compliance Certificate
Exhibit 7.10 Form of Joinder Agreement
Exhibit 8.6 Form of Officer's Certificate Regarding Stock Repurchases
Exhibit 11.3(b) Form of Assignment and Assumption
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CREDIT AGREEMENT
THIS
CREDIT AGREEMENT (this "
Credit Agreement") is entered into as of
January 2, 2003 among ORTHODONTIC CENTERS OF AMERICA, INC., a Delaware
corporation, as Borrower, certain Domestic Subsidiaries of the Borrower, as
Guarantors, the Lenders and BANK OF AMERICA, N.A., as Administrative Agent, L/C
Issuer and Alternative Rate Lender.
RECITALS
WHEREAS, the Borrower and the Guarantors have requested the Lenders to
provide a senior credit facility to the Borrower in an aggregate principal
amount of $125,000,000 consisting of a $100,000,000 revolving credit facility
and a $25,000,000 term loan; and
WHEREAS, the Lenders party hereto have agreed to make the requested
senior credit facility available to the Borrower on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
The following terms shall have the meanings specified herein unless the
context otherwise requires. Defined terms herein shall include in the singular
number the plural and in the plural the singular:
"Acquisition" means any transaction or series of related
transactions, consummated on or after the date hereof, by which any
Credit Party directly, or indirectly through one or more Subsidiaries,
(a) acquires any going business, or all or substantially all of the
assets, of any Person, whether through purchase of assets, merger or
otherwise or (b) acquires securities or other ownership interests of
any Person resulting in such Credit Party or any Subsidiary, directly
or indirectly, having at least a majority of combined voting power of
the then outstanding securities or other ownership interests of such
Person.
"Acquisition Amount" means, with respect to any Acquisition,
the sum (without duplication) of (a) the amount of cash paid by the
Credit Parties and their Subsidiaries in connection with such
Acquisition, (b) the Fair Market Value of all Capital Stock of the
Borrower issued or given in connection with such Acquisition, (c) the
amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of all Indebtedness incurred, assumed
or acquired by the Credit Parties and their Subsidiaries in connection
with such Acquisition, (d) all additional purchase price amounts in
connection with such Acquisition in the form of earnouts and other
contingent obligations that should be recorded as a liability on the
balance sheet of the Credit Parties and their Subsidiaries or expensed,
in either event in accordance with GAAP, Regulation S-X under the
Securities Act or any other rule or regulation of the Securities and
Exchange Commission, (e) all amounts paid in respect of covenants not
to compete, consulting agreements and other affiliated contracts in
connection with such Acquisition, (f) the amount of all transaction
fees and expenses (including, without limitation, finders' fees and
expenses, but excluding legal and accounting fees and expenses)
incurred by the Credit Parties and their Subsidiaries in connection
with such Acquisition and (g) the aggregate fair market value of all
other consideration given by the Credit Parties and their Subsidiaries
in connection with such Acquisition. For purposes of this
Credit
Agreement, all amounts included in calculating the Acquisition Amount
with respect to any Acquisition for which the Acquisition Amount is
payable or determinable in a currency other than Dollars shall be
valued at the Dollar Equivalent thereof as of the relevant date of
determination.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Consolidated Indebtedness" means, as of any date,
the sum of (a) Consolidated Indebtedness as of such date plus (b) the
product of (i) Consolidated Lease Expense as of the last day of the
most recent fiscal quarter for the four quarter period ending on such
date multiplied by (ii) eight.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" means Bank of America or any successor
administrative agent appointed pursuant to Section 10.9.
"Administrative Agent's Office" means, with respect to any
currency, the Administrative Agent's address and, as appropriate,
account as set forth on Schedule 11.1 with respect to such currency, or
such other address or account with respect to such currency as the
Administrative Agent may from time to time notify to the Borrower and
the Lenders.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Administrative Fees" has the meaning set forth in Section
3.4(c).
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power (a) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such corporation
or (b) to direct or cause direction of the management and policies of
such corporation, whether through the ownership of voting securities,
by contract or otherwise.
"Affiliated Practice" means any dentist, pediatric dentist,
orthodontist, professional association, professional corporation,
partnership or similar Person for whose practice a Credit Party or any
of its Subsidiaries provides business, management, administrative or
other non-clinical support services pursuant to a Service Agreement;
provided, however, any Litigating ORAL Affiliated Practice shall not be
considered an Affiliated Practice to the extent, and only during the
period, that such Affiliated Practice is engaged in litigation with any
Credit Party or any of its Subsidiaries.
"Agent-Related Persons" means the Agents, together with their
Affiliates (including, in the case of Bank of America in its capacities
as the Administrative Agent, the Collateral Agent and the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"Agents" means the Administrative Agent and the Collateral
Agent.
"Alternative Rate" means a rate of interest for all or part of
a Loan agreed to between the Alternative Rate Lender and the Borrower
pursuant to Section 2.6.
"Alternative Rate Agreement" means, with respect to any Loan
or any portion thereof (including any continuations thereof to
successive Interest Periods of like duration during the applicable
Alternative Rate Period), the agreement between the Borrower and the
Alternative Rate Lender pursuant to Section 2.6 that the Borrower's
interest payment obligation with respect to such Loan (including
continuations thereof) during the Alternative Rate Period shall be to
pay interest at the Alternative Rate rather than the Base Rate or the
Eurodollar Rate otherwise applicable to such Loan.
"Alternative Rate Breakage Amount" means the amount of any
loss, cost or expense incurred by the Alternative Rate Lender (as
calculated by it in a commercially reasonable manner, in connection
with
2
which the Alternative Rate Lender may use any reasonable averaging or
attribution methods) as a result of its termination of, or acquisition
of an offsetting position with respect to, all or any portion of any
funding or other hedging arrangement entered into by the Alternative
Rate Lender in whole or in part in connection with an Alternative Rate
Agreement. If the Alternative Rate Breakage Amount calculated by the
Alternative Rate Lender is a positive number, then such amount shall be
payable by the Borrower pursuant to Section 3.14(b).
"Alternative Rate Lender" means Bank of America in its
capacity as party to an Alternative Rate Agreement with the Borrower
pursuant to Section 2.6.
"Alternative Rate Period" means, with respect to any Loan
subject to an Alternative Rate Agreement, the stated duration of such
Alternative Rate Agreement.
"Applicable Percentage" means, for Base Rate Loans, Eurodollar
Loans, L/C Fees and Commitment Fees, the appropriate applicable
percentages, in each case, corresponding to the Leverage Ratio in
effect as of the most recent Calculation Date as shown below:
Commitment Fees
--------------------------------------
Unused Revolving Unused Revolving
Applicable Commitment > 50% Commitment <=
Applicable Percentage for of 50% of
Pricing Leverage Percentage for Eurodollar Loans Revolving Revolving
Level Ratio Base Rate Loans and for L/C Fees Committed Amount Committed Amount
------------- ------------------- ------------------ ------------------ ------------------ ------------------
1 < 1.75 to 1.0 0.50% 1.50% 0.450% 0.325%
------------- ------------------- ------------------ ------------------ ------------------- ------------------
2 => 1.75 to 1.0 but
< 2.0 to 1.0 0.75% 1.75% 0.475% 0.350%
------------- ------------------- ------------------ ------------------ ------------------- ------------------
3 => 2.0 to 1.0 but
< 2.5 to 1.0 1.00% 2.00% 0.500% 0.375%
------------- ------------------- ------------------ ------------------ ------------------- ------------------
4 => 2.5 to 1.0 but
< 2.75 to 1.0 1.25% 2.25% 0.525% 0.400%
------------- ------------------- ------------------ ------------------ ------------------- ------------------
5 => 2.75 to 1.0 1.50% 2.50% 0.550% 0.425%
------------- ------------------- ------------------ ------------------ ------------------- ------------------
The Applicable Percentages shall be determined and adjusted
quarterly on the date (each a "Calculation Date") five Business Days
after the date by which the Borrower is required to provide the
Compliance Certificate in accordance with the provisions of Section
7.2(a); provided that the initial Applicable Percentages shall be based
on Pricing Level 3 (as shown above) and shall remain at Pricing Level 3
until the first Calculation Date subsequent to the Closing Date, and,
thereafter, the Pricing Level shall be determined by the Leverage Ratio
calculated as of the most recent Calculation Date; provided further
that if the Borrower fails to provide the Compliance Certificate
required by Section 7.2(a) on or before the most recent Calculation
Date, the Applicable Percentages from such Calculation Date shall be
based on Pricing Level 5 until such time that an appropriate Compliance
Certificate is provided whereupon the Pricing Level shall be determined
by the then
3
current Leverage Ratio. Each Applicable Percentage shall be effective
from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Percentage shall be applicable to all
existing Loans and Letters of Credit as well as any new Loans made or
Letters of Credit issued.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, together with
its successors and/or assigns.
"Asset Disposition" means any sale, assignment, transfer or
other disposition by the Credit Parties or any of their Subsidiaries to
any other Person (other than to another Credit Party), whether in one
transaction or in a series of related transactions, of any of its
assets, business units or other properties (including any interests in
property, whether tangible or intangible, and including Capital Stock
of Subsidiaries), but excluding any sale, assignment, transfer or other
disposition (a) made in accordance with the terms of Sections 8.4(a) -
(e), or (b) made in accordance with the terms of Section 8.4(g) to the
extent the requirements set forth in Section 8.4(g)(iii) with respect
to the reinvestment of the Net Cash Proceeds from such sale,
assignment, transfer or other disposition are satisfied; provided that,
if such requirements set forth in Section 8.4(g)(iii) are not
satisfied, such sale, assignment, transfer or other disposition shall
constitute an "Asset Disposition" and such Net Cash Proceeds shall then
be used to prepay Loans in accordance with the terms of Section
3.3(b)(ii). It is understood and agreed that any Service Agreement
Buy-Out of a Litigating ORAL Affiliated Practice shall not be an Asset
Disposition but that any Service Agreement Buy-Out other than of a
Litigating ORAL Affiliated Practice shall be an Asset Disposition.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit 11.3(b).
"Authorized Officer" means any of the president, chief
executive officer, chief financial officer, chief operating officer or
treasurer of the Borrower.
"Bank of America" means Bank of America, N.A., together with
its successors and/or assigns.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Base Rate" means for any day a fluctuating rate per annum
equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and
(b) the rate of interest in effect for such day as publicly announced
from time to time by Bank of America as its "prime rate" (the "Prime
Rate"). The Prime Rate is a rate set by Bank of America based upon
various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by Bank
of America shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means any Loan (or any portion thereof)
bearing interest at a rate determined by reference to the Adjusted Base
Rate.
"Borrower" means Orthodontic Centers of America, Inc., a
Delaware corporation, together with its successors and permitted
assigns.
"Borrowing" means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Loans,
having the same Interest Period made by each of the Lenders pursuant to
Section 2.1.
"Bridge
Credit Agreement" means that certain Bridge
Credit
Agreement, dated as of November 9, 2001, among the Borrower, the
Guarantors party thereto, the lenders party thereto, Bank of America,
as
4
administrative agent, and Bank One, N.A., as syndication agent, as
previously amended, modified or supplemented prior to the Closing Date.
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by Law or other governmental action to close in
New York,
New York or Charlotte, North Carolina.
"Capital Expenditures" means, for any period, the aggregate
amount (whether paid in cash or accrued as a liability) that would, in
accordance with GAAP, be included on the consolidated statement of cash
flows of the Credit Parties and their Subsidiaries for such period as
additions to equipment, fixed assets, real property or improvements or
other capital assets (including, without limitation, capital lease
obligations); provided, however, that Capital Expenditures shall not
include any such expenditures (a) for replacements and substitutions
for capital assets, to the extent made with the proceeds of insurance
or (b) made in connection with Permitted Acquisitions.
"Capital Stock" means (a) in the case of a corporation, all
classes of capital stock of such corporation, (b) in the case of a
partnership, partnership interests (whether general or limited), (c) in
the case of a limited liability company, membership interests and (d)
any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person; including, in each case, all warrants,
rights or options to purchase any of the foregoing.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer.
"Cash Equivalents" means (a) securities issued or
unconditionally guaranteed by the United States of America or any
agency or instrumentality thereof, backed by the full faith and credit
of the United States of America and maturing within 90 days from the
date of acquisition, (b) commercial paper issued by any Person
organized under the Laws of the United States of America, maturing
within 90 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof
by Standard & Poor's Ratings Services or at least P-1 or the equivalent
thereof by Xxxxx'x Investors Service, Inc., (c) time deposits and
certificates of deposit maturing within 90 days from the date of
issuance and issued by a bank or trust company organized under the Laws
of the United States of America or any state thereof that has combined
capital and surplus of at least $500,000,000 and that has (or is a
subsidiary of a bank holding company that has) a long-term unsecured
debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., (d) repurchase obligations with a term
not exceeding seven days with respect to underlying securities of the
types described in clause (a) above entered into with any bank or trust
company meeting the qualifications specified in clause (c) above, and
(e) money market funds at least 95% of the assets of which are
continuously invested in securities of the type described in clause (a)
above.
"Closing Date" means the date of this
Credit Agreement, which
is the first date all the conditions precedent in Section 5.1 are
satisfied or waived in accordance with Section 5.1 (or, in the case of
Section 5.1(m), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986 and the rules
and regulations promulgated thereunder, as amended, modified, succeeded
or replaced from time to time.
"Collateral" has the meaning set forth in the Collateral
Documents.
"Collateral Agent" means Bank of America, in its capacity as
collateral agent for the Lenders under the Collateral Documents, and
its successors and permitted assigns in such capacity.
5
"Collateral Documents" means a collective reference to the
Pledge and Security Agreement and such other documents, instruments and
agreements executed and delivered in connection with the attachment and
perfection of the Collateral Agent's security interests and liens
arising thereunder, including without limitation, Uniform Commercial
Code financing statements.
"Commitment" means, (a) as to each Revolving Lender, its
obligation to (i) make Revolving Loans to the Borrower pursuant to
Section 2.1, or (ii) fund or purchase Participation Interests in L/C
Obligations pursuant to Section 2.2 and (b) as to each Term Loan
Lender, its obligation make Term Loans to the Borrower pursuant to
Section 2.3, in each case in an aggregate principal amount at any one
time outstanding not to exceed such Lender's Pro Rata Share of the
Revolving Committed Amount or Term Loan Committed Amount, as
applicable, as set forth opposite such Lender's name on Schedule 1.1(a)
or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this
Credit Agreement.
"Commitment Fees" has the meaning set forth in Section 3.4(a).
"Compensation Period" has the meaning set forth in Section
3.2(c)(ii).
"Compliance Certificate" means a fully completed and duly
executed officer's certificate in the form of Exhibit 7.2(a), together
with a Covenant Compliance Worksheet.
"Consolidated Cash Flow" means, for any period, with respect
to the Credit Parties and their Subsidiaries on a consolidated basis,
an amount equal to:
(a) Consolidated Net Income for such period, plus
(b) an amount which in the determination of
Consolidated Net Income for such period has been deducted for
(i) Consolidated Interest Expense for such period, (ii)
aggregate federal, state, local and other income tax expense
for such period, as determined in accordance with GAAP, (iii)
depreciation and amortization charges for such period and (iv)
Consolidated Lease Expense for such period, plus
(c) extraordinary and nonrecurring noncash losses,
impairments, expenses or charges (including in connection with
the acquisition, purchase, sale or writedown of assets)
reducing Consolidated Net Income for such period (not to
exceed $10,000,000 during any four consecutive fiscal quarter
period); provided that any cash expenses in respect of any
noncash losses, expenses or charges included in the
calculation of Consolidated Cash Flow pursuant to this clause
(c) shall be included (i.e. deducted) in the calculation of
Consolidated Cash Flow for the period in which expended, minus
(d) extraordinary and nonrecurring gains (including
in connection with the sale or write-up of assets or the
settlement of contract disputes) and other noncash credits
increasing Consolidated Net Income for such period (not to
exceed $10,000,000 during any four consecutive fiscal quarter
period).
"Consolidated Fixed Charges" means, for any period, with
respect to the Credit Parties and their Subsidiaries on a consolidated
basis, an amount equal to:
(a) Consolidated Interest Expense for such period,
plus
(b) aggregate federal, state, local and other income
tax expense for such period, as determined in accordance with
GAAP, plus
(c) Capital Expenditures for such period, plus
6
(d) Consolidated Lease Expense for such period, plus
(e) the aggregate amount of all scheduled payments of
principal on Funded Debt (including, without limitation,
Principal Amortization Payments) required to have been made by
the Credit Parties and their Subsidiaries during such period
(whether or not such payments are actually made), plus
(f) the aggregate of all amounts paid by the Borrower
during such period as dividends or distributions in respect of
its Capital Stock or to purchase, redeem, retire or otherwise
acquire its Capital Stock.
"Consolidated Funded Debt" means, as of any date of
determination, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis, an amount equal to all Funded
Debt of the Credit Parties and their Subsidiaries as of such date.
"Consolidated Indebtedness" means, as of any date of
determination, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis, an amount equal to all
Indebtedness of the Credit Parties and their Subsidiaries as of such
date.
"Consolidated Interest Expense" means, for any period, with
respect to the Credit Parties and their Subsidiaries on a consolidated
basis, an amount equal to:
(a) total interest expense (not reduced by interest
income) of the Credit Parties and their Subsidiaries for such
period in respect of Consolidated Funded Debt, as determined
in accordance with GAAP, plus
(b) all net amounts payable under or in respect of
Hedging Agreements, to the extent paid or accrued by a Credit
Party or its Subsidiaries during such period, plus ----
(c) all commitment fees, financing fees and other
ongoing fees in respect of Funded Debt (including the
Commitment Fees and the Administrative Fees) paid, accrued or
capitalized by the Credit Parties and their Subsidiaries
during such period, as determined in accordance with GAAP.
"Consolidated Lease Expense" means, for any period, with
respect to the Credit Parties and their Subsidiaries on a consolidated
basis, the sum of all lease and rental expense of the Credit Parties
and their Subsidiaries for such period (including, without limitation,
all such lease and rental expense accrued or capitalized during such
period, whether or not actually paid during such period, including
capital lease obligations), as determined in accordance with GAAP (but
excluding amounts paid in respect of taxes, utilities, insurance,
common area maintenance and other like charges associated with the
lease and rental of real property).
"Consolidated Net Income" means, for any period, with respect
to the Credit Parties and their Subsidiaries on a consolidated basis,
net income (or loss) for the Credit Parties and their Subsidiaries for
such period, as determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date of
determination, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis, the net worth of the Credit
Parties and their Subsidiaries as of such date, as determined in
accordance with GAAP, but excluding any Disqualified Capital Stock.
"Contingent Obligation" means, with respect to any Person, any
direct or indirect liability of such Person with respect to any
Indebtedness, liability or other obligation (the "primary obligation")
of another
7
Person (the "primary obligor"), whether or not contingent, (a) to
purchase, repurchase or otherwise acquire such primary obligation or
any property constituting direct or indirect security therefor, (b) to
advance or provide funds (i) for the payment or discharge of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (c) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor in respect
thereof to make payment of such primary obligation or (d) otherwise to
assure or hold harmless the owner of any such primary obligation
against loss or failure or inability to perform in respect thereof;
provided, however, that, with respect to the Credit Parties and their
Subsidiaries, the term Contingent Obligation shall not include
endorsements for collection or deposit in the ordinary course of
business. The amount of any Contingent Obligation of any Person shall
be deemed to be an amount equal to the maximum amount of such Person's
liability with respect to the stated or determinable amount of the
primary obligation for which such Contingent Obligation is incurred or,
if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder).
"Covenant Compliance Worksheet" shall mean a fully completed
worksheet in the form of Attachment A to Exhibit 7.2(a).
"
Credit Agreement" has the meaning set forth in the Preamble hereof.
"Credit Documents" means this Credit Agreement, the Notes, the
Collateral Documents, any Joinder Agreement, any Notice of Borrowing,
any Notice of Continuation/Conversion, any Alternative Rate Agreement
and any other document, agreement or instrument entered into or
executed in connection with the foregoing.
"Credit Exposure" has the meaning set forth in the definition
of "Required Lenders."
"Credit Extension" means each of the following: (a) the making
of a Loan and (b) an L/C Credit Extension.
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders and the Agents,
whenever arising, under this Credit Agreement, the Notes or any of the
other Credit Documents to which any Credit Party is a party and (b) all
liabilities and obligations owing from any Credit Party to any Lender,
or any Affiliate of a Lender, arising under Hedging Agreements
permitted hereunder.
"De Minimis Subsidiary" means any Subsidiary of the Borrower
(other than a Guarantor) (a) that does not have continuing operations,
(b) the total assets of which do not exceed, on a book value basis,
$100,000 at any time and (c) the total annual revenues of which do not
exceed $50,000, which such revenues, in the case of a newly acquired or
formed Subsidiary, shall be calculated (i) on an annualized basis as of
the end of each of the first three complete fiscal quarters following
the acquisition or formation of such Subsidiary and (ii) thereafter on
a rolling four fiscal quarter basis as of the end of each fiscal
quarter.
"Debt Issuance" means the issuance, incurrence or sale by a
Credit Party or any of its Subsidiaries of any debt securities or other
Indebtedness, whether in a public offering of such debt securities or
Indebtedness or otherwise, other than any Indebtedness expressly
permitted under Section 8.2.
"Debtor Relief Laws" means the Bankruptcy Code, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or
other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
8
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Default Rate" means an interest rate equal to two percent
(2%) plus the rate that otherwise would be applicable (or if no rate is
applicable, the Adjusted Base Rate plus two percent (2%) per annum).
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make a Loan or purchase or fund a Participation Interest
(but only for so long as such Loan is not made or such Participation
Interest is not purchased or funded), (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement (but only for so long as
such amount has not been repaid) or (c) has been deemed insolvent or
has become subject to a bankruptcy or insolvency proceeding or to a
receiver, trustee or similar official.
"Disqualified Capital Stock" means, with respect to any
Person, any Capital Stock of such Person that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event or otherwise, (a)
matures or is mandatorily redeemable or subject to any mandatory
repurchase requirement, pursuant to a sinking fund obligation or
otherwise, (b) is redeemable or subject to any mandatory repurchase
requirement at the sole option of the holder thereof, or (c) is
convertible into or exchangeable for (whether at the option of the
issuer or the holder thereof) (i) debt securities or (ii) any Capital
Stock referred to in (a) or (b) above, in each case under (a), (b) or
(c) above at any time on or prior to the first anniversary of the
Maturity Date; provided, however, that only the portion of Capital
Stock that so matures or is mandatorily redeemable, is so redeemable at
the option of the holder thereof, or is so convertible or exchangeable
on or prior to such date shall be deemed to be Disqualified Capital
Stock.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Dollar Equivalent" means, at any time, (a) with respect to
any amount denominated in Dollars, such amount, and (b) with respect to
any amount denominated in any foreign currency, the equivalent amount
thereof in Dollars as reasonably determined by the Administrative Agent
at such time on the basis of the Spot Rate for the purchase of Dollars
with such foreign currency.
"Domestic Subsidiary" means each direct and indirect
Subsidiary of the Borrower that is organized under the Laws of the
United States of America or any state thereof or the District of
Columbia.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a
Lender, (c) an Approved Fund and (d) any other Person approved by the
Administrative Agent, the L/C Issuer and the Borrower (such approval
not to be unreasonably withheld or delayed); provided that (i) the
Borrower's consent is not required during the existence and
continuation of a Default or an Event of Default, (ii) approval by the
Borrower shall be deemed given if no objection is received by the
assigning Lender and the Administrative Agent from the Borrower within
five Business Days after notice of such proposed assignment has been
delivered to the Borrower and (iii) neither any Credit Party nor any
Subsidiary or Affiliate of any Credit Party shall qualify as an
Eligible Assignee.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigations (other
than internal reports prepared by any Person in the ordinary course of
its business and not in response to any third party action or request
of any kind) or proceedings relating in any way to any actual or
alleged violation of or liability under any Environmental Law or
relating to any permit issued, or any approval given, under any such
Environmental Law (collectively, "Claims"), including, without
limitation, (a) any and all Claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law and (b) any and
all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
9
resulting from Hazardous Substances or arising from alleged injury or
threat of injury to human health or the environment.
"Environmental Laws" shall mean any and all federal, state and
local laws, statutes, ordinances, rules, regulations, permits,
licenses, approvals, rules of common law and orders of courts or
Governmental Authorities, relating to the protection of human health or
occupational safety or the environment, now or hereafter in effect and
in each case as amended from time to time, including, without
limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation,
handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Substances.
"Equity Issuance" means the issuance, sale or other
disposition by a Credit Party or any of its Subsidiaries of its Capital
Stock, any rights, warrants or options to purchase or acquire any
shares of its Capital Stock or any other security or instrument
representing, convertible into or exchangeable for an equity interest
in such Credit Party or any of its Subsidiaries; provided, however,
that the term Equity Issuance shall not include (a) the issuance or
sale of Capital Stock by any of the Subsidiaries of the Borrower to the
Borrower or any other Subsidiary; provided that such Capital Stock is
pledged to the Collateral Agent pursuant to a Pledge and Security
Agreement, (b) any Capital Stock of the Borrower issued or sold in
connection with any Permitted Acquisition and constituting all or a
portion of the applicable purchase price, or (c) any rights, options or
Capital Stock issued pursuant to employee, director or affiliated
practitioner or practice stock, incentive, stock option or stock
purchase plans or programs.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute, and all
rules and regulations from time to time promulgated thereunder.
"ERISA Affiliate" means any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under
"common control" with, or a member of the same "controlled group" as,
any Credit Party or any of its Subsidiaries, within the meaning of
Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
"ERISA Event" means: (a) a Reportable Event with respect to a
Plan or a Multiemployer Plan, (b) a complete or partial withdrawal by
any Credit Party, any of its Subsidiaries or any ERISA Affiliate from a
Multiemployer Plan, or the receipt by any Credit Party, any of its
Subsidiaries or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA, (c) the distribution by any Credit Party, any
of its Subsidiaries or any ERISA Affiliate under Section 4041 or 4041A
of ERISA of a notice of intent to terminate any Plan or the taking of
any action to terminate any Plan, (d) the commencement of proceedings
by the PBGC under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt by any
Credit Party, any of its Subsidiaries or any ERISA Affiliate of a
notice from any Multiemployer Plan that such action has been taken by
the PBGC with respect to such Multiemployer Plan, (e) the institution
of a proceeding by any fiduciary of any Multiemployer Plan against any
Credit Party, any of its Subsidiaries or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days,
(f) the imposition upon any Credit Party, any of its Subsidiaries or
any ERISA Affiliate of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, or the imposition or threatened imposition of any Lien upon any
assets of any Credit Party, any of its Subsidiaries or any ERISA
Affiliate as a result of any alleged failure to comply with the Code or
ERISA in respect of any Plan, (g) the engaging in or otherwise becoming
liable for a nonexempt Prohibited Transaction by any Credit Party, any
of its Subsidiaries or any ERISA Affiliate, (h) a violation of the
applicable requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Code by any fiduciary of any
Plan for which any Credit Party, any of its Subsidiaries or any ERISA
Affiliate may be directly or indirectly liable, (i) the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Code
or Section 307 of ERISA, would result in the loss of tax-exempt status
of the trust of which such Plan is a part if any Credit Party, any of
its Subsidiaries or any ERISA Affiliate fails to timely provide
security to such
10
Plan in accordance with the provisions of such sections or (j) the
withdrawal of any Credit Party, any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a play year in which it
was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan.
"Eurodollar Loan" means a Loan (or any portion thereof)
bearing interest based at a rate determined by reference to the
Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Interest Period with respect
to any Eurodollar Loan:
(a) the rate per annum equal to the rate determined
by the Administrative Agent to be the offered rate that
appears on the page of the Telerate screen (or any successor
thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery
on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause
(b) does not appear on such page or service or such page or
service shall not be available, the rate per annum equal to
the rate determined by the Administrative Agent to be the
offered rate on such other page or other service that displays
an average British Bankers Association Interest Settlement
Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such
Interest Period, or
(c) if the rates referenced in the preceding clauses
(a) and (b) are not available, the rate per annum reasonably
determined by the Administrative Agent as the rate of interest
at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate
amount of the Eurodollar Loan being made, continued or
converted by Bank of America and with a term equivalent to
such Interest Period would be offered by Bank of America's
London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such
Interest Period.
"Event of Default" has the meaning set forth in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
the rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.
"Existing Credit Agreement" means that certain Credit
Agreement, dated as of October 8, 1998, among the Borrower, certain
Subsidiaries of the Borrower party thereto, as borrowers, the lenders
party thereto, Wachovia Bank, National Association (formerly known as
First Union National Bank), as administrative agent and collateral
agent, Bank of America, as documentation agent, and Citibank, N.A., as
syndication agent, as such agreement has been amended or modified on or
prior to the Closing Date.
"Existing Letters of Credit" means the letters of credit set
forth on Schedule 1.1(b).
"Fair Market Value" means, with respect to any Capital Stock
of any Credit Party or any of its Subsidiaries given in connection with
an Acquisition, the value given to such Capital Stock for purposes of
such Acquisition by the parties thereto, as determined in good faith
pursuant to the relevant acquisition agreement or otherwise in
connection with such Acquisition.
"Federal Funds Rate" means, for any day, the rate per annum
equal to the weighted average (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) of the rates on overnight Federal funds
11
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank 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 (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.
"Fee Letter" means that certain letter agreement, dated as of
November 13, 2002, among the Borrower, Bank of America and the
Arranger, as amended, modified, supplemented or restated from time to
time.
"Financial Officer" means, with respect to the Borrower, the
chief financial officer, vice president-finance, principal accounting
officer or treasurer of the Borrower.
"Fixed Charge Coverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of (a) Consolidated Cash Flow for the period
of four consecutive fiscal quarters ending on such date to (b)
Consolidated Fixed Charges for the period of four consecutive fiscal
quarters ending on such date.
"Foreign Subsidiary" means each direct and indirect Subsidiary
of the Borrower that is organized under the laws of any nation, state
or jurisdiction other than the United States of America or any state
thereof or the District of Columbia.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Funded Debt" means, with respect to any Person, (a) all
Indebtedness for borrowed money of such Person, (b) all purchase money
Indebtedness of such Person, (c) the principal portion of all
obligations of such Person under capital leases, (d) all Contingent
Obligations of the Credit Parties and their Subsidiaries as to Funded
Debt of another Person and (e) all Incentive Program Indebtedness of
such Person. Notwithstanding the foregoing, the Loans shall at all
times constitute Funded Debt of the Borrower.
"GAAP" means generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession)
or that are promulgated by any Governmental Authority having
appropriate jurisdiction.
"Government Acts" has the meaning set forth in Section 2.2(l).
"Governmental Authority" means any domestic or foreign nation
or government, any state or other political subdivision thereof and any
central bank thereof, any municipal, local, city or county government,
and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government (including,
without limitation, any state dental board and any federal or state
securities board or commission) and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise,
by any of the foregoing.
"Granting Lender" has the meaning specified in Section
11.3(g).
"Guarantor" means each of the direct or indirect Domestic
Subsidiaries of the Borrower (other than De Minimis Subsidiaries) and
each other Person who becomes a Guarantor hereunder, together with
their successors and permitted assigns.
12
"Guaranty" means the guaranty of the Credit Party Obligations
provided by the Guarantors pursuant to Section 4.
"Hazardous Substances" means any substances or materials (a)
that are or become defined as hazardous wastes, hazardous substances,
pollutants, contaminants or toxic substances under any Environmental
Law, (b) that are defined by any Environmental Law as toxic, explosive,
corrosive, ignitable, infectious, radioactive, mutagenic or otherwise
hazardous, (c) the presence of which require investigation or response
under any Environmental Law, (d) that constitute a nuisance, trespass
or health or safety hazard to Persons or neighboring properties, (e)
that consist of underground or aboveground storage tanks, whether
empty, filled or partially filled with any substance, or (f) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreements" means, collectively, interest rate
protection agreements, foreign currency exchange agreements, commodity
purchase or option agreements or other interest or exchange rate or
commodity price hedging agreements, in each case, entered into or
purchased by a Credit Party.
"Incentive Program Indebtedness" has the meaning set forth in
Section 8.2(j).
"Indebtedness" means, with respect to any Person (without
duplication), (a) all indebtedness and obligations of such Person for
borrowed money or in respect of loans or advances of any kind, (b) all
obligations of such Person evidenced by notes, bonds, debentures or
similar instruments, (c) all reimbursement obligations of such Person
with respect to surety bonds, letters of credit and bankers'
acceptances (in each case, whether or not drawn or matured and in the
stated amount thereof), (d) all obligations of such Person to pay the
deferred purchase price of property or services, (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person, (f) all
obligations of such Person as lessee under leases that are or are
required to be, in accordance with GAAP, recorded as capital leases, to
the extent such obligations are required to be so recorded, (g) all
Disqualified Capital Stock issued by such Person, with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal
to the greater of its voluntary or involuntary liquidation preference
and its maximum fixed repurchase price, but excluding accrued
dividends, if any (for purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of
such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to
be determined pursuant to this Credit Agreement, and if such price is
based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably
and in good faith by the board of directors or other governing body of
the issuer of such Disqualified Capital Stock), (h) the net termination
obligations of such Person under any Hedging Agreements, calculated as
of any date as if such agreement or arrangement were terminated as of
such date, (i) all Contingent Obligations of such Person, (j) all
obligations and liabilities of such Person incurred in connection with
any transaction or series of transactions providing for the financing
of assets through one or more securitizations or in connection with, or
pursuant to, any synthetic lease or similar off-balance sheet
financing, (k) the aggregate amount of uncollected accounts receivable
of such Person subject at the time of determination to a sale of
receivables (or similar transaction) to the extent such transaction is
effected with recourse to such Person (whether or not such transaction
would be reflected on the balance sheet of such Person in accordance
with GAAP), (l) all Incentive Program Indebtedness of such Person and
(m) all indebtedness referred to in clauses (a) through (l) above
secured by any Lien on any property or asset owned or held by such
Person regardless of whether the indebtedness secured thereby shall
have been assumed by such Person or is nonrecourse to the credit of
such Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.5(b).
"Indemnitees" has the meaning set forth in Section 11.5(b).
13
"Intercompany Notes" means the intercompany notes evidencing
Indebtedness permitted pursuant to Section 8.2(d).
"Interest Payment Date" means, (a) as to any Eurodollar Loan,
the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a
Eurodollar Loan exceeds three months, the respective dates that fall
every three months after the beginning of such Interest Period shall
also be Interest Payment Dates, (b) as to any Base Rate Loan, the last
Business Day of each March, June, September and December and the
Maturity Date, and (c) as to payment of the Alternative Rate by the
Borrower to the Alternative Rate Lender with respect to a Loan or any
portion thereof, the Interest Payment Date applicable to such Loan (or
such other date as agreed to between the Alternative Rate Lender and
the Borrower) and the Maturity Date.
"Interest Period" means, as to each Eurodollar Loan, the
period commencing on the date such Eurodollar Loan is disbursed or
converted to or continued as a Eurodollar Loan and ending on the date
one, two, three or six months thereafter, as selected by the Borrower
in its Notice of Borrowing or Notice of Continuation/Conversion;
provided that:
(a) any Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period; and
(c) no Interest Period shall extend beyond the
Maturity Date.
"Investments" has the meaning set forth in Section 8.5.
"Joinder Agreement" means a joinder agreement substantially in
the form of Exhibit 7.10.
"Laws" means, collectively, all international, foreign,
federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authority, in each case whether or not having the force of law.
"L/C Credit Extension" means, with respect to any Letter of
Credit, the issuance thereof, the extension of the expiry date thereof,
the renewal or increase of the amount thereof or any extension of
credit resulting from a drawing thereunder that has not been
reimbursed.
"L/C Fees" has the meaning set forth in Section 3.4(b).
"L/C Fronting Fee" has the meaning set forth in Section
2.2(i).
"L/C Issuer" means Bank of America in its capacity as issuer
of Letters of Credit hereunder, or any successor issuer of Letters of
Credit hereunder.
"L/C Obligations" means, as of any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the
aggregate of all unreimbursed drawings under any Letter of Credit.
14
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Eligible Assignee which may become
a Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Lending Office" means, as to any Lender, the office or
offices of such Lender described as such in such Lender's
Administrative Questionnaire, or such other office or offices as a
Lender may from time to time notify the Borrower and the Administrative
Agent.
"Letter of Credit" means any letter of credit issued hereunder
and shall include the Existing Letters of Credit.
"Letter of Credit Application" means an application and
agreement for the issuance or amendment of a Letter of Credit in the
form from time to time in use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven
days prior to the Maturity Date then in effect (or, if such day is not
a Business Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to TEN
MILLION DOLLARS ($10,000,000). The Letter of Credit Sublimit is part
of, and not in addition to, the Revolving Committed Amount.
"Leverage Ratio" means, as of any date, the ratio of (a)
Adjusted Consolidated Indebtedness as of such date to (b) Consolidated
Cash Flow as of the last day of the most recent fiscal quarter for the
period of the prior four consecutive fiscal quarters ending on such
day.
"Lien" means any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority,
charge or other encumbrance of any nature, whether voluntary or
involuntary, including, without limitation, the interest of any vendor
or lessor under any conditional sale agreement, title retention
agreement, capital lease or any other lease or arrangement having
substantially the same effect as any of the foregoing.
"Licenses" means any and all licenses (including provisional
licenses), certificates of need, accreditations, permits, franchises,
rights to conduct business, approvals (by a Governmental Authority or
otherwise), consents, qualifications, operating authority and any other
authorizations.
"Limitation" means a revocation, suspension, termination,
impairment, probation, limitation, non-renewal, forfeiture, declaration
of ineligibility, loss of status as a participating provider in a Third
Party Payor Arrangement, and the loss of any other rights.
"Litigating ORAL Affiliated Practices" means those Affiliated
Practices set forth on Schedule 1.1(c) hereto.
"Loan" or "Loans" means the Revolving Loans and the Term Loans
(or any portion of any Loan), individually or collectively, as
appropriate.
"Management Letter" has the meaning set forth in Section
7.2(c).
"Mandatory Borrowing" has the meaning set forth in Section
2.2(e).
"Margin Stock" has the meaning ascribed to such term in
Regulation U.
"Material Adverse Change" means a material adverse change in
the condition (financial or otherwise), operations, business,
performance, properties or assets of the Credit Parties and their
Subsidiaries, taken as a whole.
15
"Material Adverse Effect" means a material adverse effect upon
(a) the business, assets, liabilities (actual or contingent),
operations or condition (financial or otherwise) of the Credit Parties
and their Subsidiaries, taken as a whole, (b) the ability of the Credit
Parties and their Subsidiaries, taken as a whole, to perform their
obligations under this Credit Agreement or any of the other Credit
Documents or (c) the legality, validity or enforceability of this
Credit Agreement or any of the other Credit Documents or the rights and
remedies of the Agents and the Lenders hereunder and thereunder.
"Material Contract" has the meaning set forth in Section 6.18.
"Maturity Date" means January 2, 2006.
"Medicaid" means that government-sponsored entitlement program
under Title XIX of the Social Security Act that provides medical
assistance based on specific eligibility criteria.
"Medicare" means that government-sponsored entitlement program
under Title XVIII of the Social Security Act that provides for a health
insurance system for eligible elderly and disabled individuals.
"Multiemployer Plan" means any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which any Credit Party, any
of its Subsidiaries or any ERISA Affiliate makes, is making or is
obligated to make contributions or has made or been obligated to make
contributions.
"Multiple Employer Plan" means a Single Employer Plan to which
any Credit Party, any of its Subsidiaries or any ERISA Affiliate and at
least one employer other than any Credit Party, any of its Subsidiaries
or any ERISA Affiliate are contributing sponsors.
"Net Cash Proceeds" means, in the case of any Asset
Disposition, Equity Issuance or Debt Issuance, the aggregate cash
payments received by the Credit Parties and their Subsidiaries less
reasonable and customary fees and expenses (including attorneys' fees,
accountants' fees, investment banking fees, underwriting discounts and
commissions) incurred by the Credit Parties and their Subsidiaries in
connection therewith.
"Note" or "Notes" means the Revolving Notes and the Term
Notes, individually or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a
Revolving Loan in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.4.
"Organization Documents" means (a) with respect to any
corporation, the certificate or articles of incorporation and the
bylaws (or equivalent or comparable constitutive documents with respect
to any non-U.S. jurisdiction); (b) with respect to any limited
liability company, the certificate or articles of formation or
organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation
or organization and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization
with the applicable Governmental Authority in the jurisdiction of its
formation or organization and, if applicable, any certificate or
articles of formation or organization of such entity.
"Original Rate" has the meaning set forth in Section 3.1(c).
"Other Taxes" has the meaning set forth in Section 3.13(b).
16
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Participant" has the meaning set forth in Section 11.3(d).
"Participation Interest" means (a) the purchase by a Revolving
Lender of a participation in Letters of Credit or L/C Obligations as
provided in Section 2.2 or (b) the purchase by a Lender of a
participation in any Loan as provided in Section 3.8.
"Patient Contracts" means patient contracts between the
Affiliated Practices and their respective patients (or parent, guardian
or other responsible party) for the provision of orthodontic and
pediatric dental services in an Affiliated Practice center or office
that is subject to a Service Agreement.
"Permitted Acquisition" means (a) any Acquisition with respect
to which all of the following conditions are satisfied: (i) each
business or assets thereof acquired shall be within (or any assets
acquired shall be used within) the permitted lines of business
described in Section 8.8, (ii) any Capital Stock given as consideration
in connection therewith shall be Capital Stock of the Borrower, (iii)
the Board of Directors or equivalent governing body of the Person whose
Capital Stock or business is acquired shall have approved such
Acquisition, (iv) all of the conditions and requirements of Sections
7.9 and 7.10 applicable to such Acquisition are satisfied, and (v)
after giving effect to such Acquisition, the Credit Parties and their
Subsidiaries are in compliance on a Pro Forma Basis with the financial
covenants set forth Section 8.14; or (b) any other Acquisition to which
the Required Lenders shall have given their prior written consent
(which consent may be in their sole discretion and may be given subject
to such additional terms and conditions as the Required Lenders shall
establish) and with respect to which all of the conditions and
requirements set forth in Sections 7.9 and 7.10, and in or pursuant to
any such consent, have been completed to the satisfaction of, or waived
in writing by, the Required Lenders.
"Permitted Liens" has the meaning set forth in Section 8.3.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any "employee benefit plan" (within the meaning
of Section 3(3) of ERISA) which is covered by ERISA and with respect to
which any Credit Party, any of its Subsidiaries or any ERISA Affiliate
is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" within the meaning of
Section 3(5) of ERISA.
"Pledge and Security Agreement" means any pledge and security
agreement executed and delivered by a Credit Party in favor of the
Collateral Agent, for the benefit of the Lenders, as amended, modified,
restated or supplemented from time to time.
"Prime Rate" has the meaning set forth in the definition of
Base Rate in this Section 1.1.
"Principal Amortization Payment" means a principal payment on
the Term Loans as required by Section 2.3(c).
"Privacy Standards" has the meaning set forth in Section 7.4.
"Pro Forma Basis" means, for purposes of determining
compliance with the financial covenants set forth in Section 8.14 as of
any date of determination, that (a) Consolidated Indebtedness and
Consolidated Funded Debt shall be determined as of such date of
determination after giving effect to any Borrowing on such date and (b)
Consolidated Net Income, Consolidated Cash Flow, Consolidated Fixed
Charges, Consolidated Interest Expense, Consolidated Lease Expense,
Consolidated Net Worth and Total Patient Contract Balances shall be as
set forth in the most recent Compliance Certificate delivered pursuant
to Section 7.2(a).
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"Pro Rata Share" means, with respect to each Lender at any
time, a fraction (expressed as a percentage, carried out to the ninth
decimal place), (a) with respect to Revolving Loans (and Letters of
Credit) the numerator of which is the amount of the commitment of such
Lender at such time to make Revolving Loans to the Borrower pursuant to
Section 2.1 and the denominator of which is the amount of the Revolving
Committed Amount at such time; provided that if the Commitment has been
terminated pursuant to Section 9.2 or otherwise, then such Pro Rata
Share of each such Lender shall be determined based on such Lender's
percentage ownership of the principal amount of outstanding Revolving
Loans plus its Participation Interest in the outstanding principal
amount of L/C Obligations and (b) with respect to Term Loans, the
outstanding principal amount of Term Loans made by such Lender. The
initial Pro Rata Share of each Lender as to Revolving Loans and Term
Loans is set forth opposite the name of such Lender on Schedule 1.1(a)
or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.
"Prohibited Transaction" means any transaction described in
(a) Section 406 of ERISA that is not exempt by reason of Section 408 of
ERISA or by reason of a Department of Labor prohibited transaction
individual or class exemption or (b) Section 4975(c) of the Code that
is not exempt by reason of Section 4975(c)(2) or 4975(d) of the Code.
"Projections" has the meaning set forth in Section 6.11(b).
"Property" means any right, title or interest in or to any
property or asset of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible.
"Register" has the meaning set forth in Section 11.3(c).
"Regulations T, U and X" means Regulations T, U and X,
respectively, of the Federal Reserve Board, and any successor
regulations.
"Reimbursable Investment" means any advance made by a Credit
Party or any of its Subsidiaries with respect to operating expenses or
fixed assets of or for an Affiliated Practice that is reimbursable over
time by the Affiliated Practice to a Credit Party or a Subsidiary
thereof, so long as such expenses or fixed assets are reflected in the
Borrower's consolidated financial statements (other than solely on a
footnote basis).
"Reimbursement Approvals" means, with respect to all Third
Party Payor Arrangements, any and all certifications, provider numbers,
provider agreements, participation agreements, accreditations and any
other similar agreements with or approvals by Governmental Authorities
or other Persons.
"Reportable Event" means (a) any "reportable event" within the
meaning of Section 4043(c) of ERISA for which the notice under Section
4043(a) of ERISA has not been waived by the PBGC (including any failure
to meet the minimum funding standard of, or timely make any required
installment under, Section 412 of the Code or Section 302 of ERISA,
regardless of the issuance of any waivers in accordance with Section
412(d) of the Code), (b) any such "reportable event" subject to advance
notice to the PBGC under Section 4043(b)(3) of ERISA, (c) any
application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code and (d) a cessation of
operations described in Section 4062(e) of ERISA.
"Request for Alternative Rate" means, with respect to an
Alternative Rate Agreement, a written request, substantially in the
form of Exhibit 2.6, duly completed and signed by a Responsible Officer
and delivered to the Alternative Rate Lender.
"Required Lenders" means Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes more than 50% of the
Credit Exposure of all Lenders at such time; provided, however, that
(a) Required Lenders shall consist of at least three (3) Lenders and
(b) if any Lender shall be a Defaulting
18
Lender at such time then there shall be excluded from the determination
of Required Lenders the aggregate principal amount of Credit Exposure
of such Lender at such time. For purposes of the preceding sentence,
the term "Credit Exposure" as applied to each Lender shall mean (i) at
any time prior to the termination of the Commitments, the sum of (A)
the Pro Rata Share of such Lender of the Revolving Committed Amount
multiplied by the Revolving Committed Amount plus (B) the outstanding
principal amount of Term Loans made by such Lender and (ii) at any time
after the termination of the Commitments, the sum of (i) the principal
balance of the outstanding Loans of such Lender plus (ii) such Lender's
Participation Interests in the face amount of the outstanding Letters
of Credit.
"Requirement of Law" means, with respect to any Person, the
Organizational Documents of such Person and any Law applicable to or
binding upon such Person or any of its property or to which such Person
or any of its property is subject or otherwise pertaining to any or all
of the transactions contemplated by this Credit Agreement and the other
Credit Documents.
"Responsible Officer" means, with respect to any Credit Party
or any of its Subsidiaries, the president, the chief executive officer,
the chief operating officer, the co-chief executive officer, the chief
financial officer, any executive officer, vice president-finance,
principal accounting officer or treasurer of such Credit Party or such
Subsidiary, and any other officer or similar official thereof
responsible for the administration of the obligations of such Credit
Party or such Subsidiary in respect of this Credit Agreement and the
other Credit Documents.
"Revolving Committed Amount" means ONE HUNDRED MILLION DOLLARS
($100,000,000) or such lesser amount as it may be reduced to from time
to time in accordance with Section 2.1(d) and Section 3.3(c).
"Revolving Lender" means any Lender whose Pro Rata Share of
the Revolving Committed Amount is greater than zero, together with its
successors and permitted assigns.
"Revolving Loans" has the meaning set forth in Section 2.1(a).
"Revolving Notes" means the promissory notes of the Borrower
in favor of each Revolving Lender evidencing the Revolving Loans
provided pursuant to Section 2.1, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time and as
evidenced in the form of Exhibit 2.1(e).
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Seller Indebtedness" has the meaning set forth in Section
8.2(f).
"Service Agreement" means any agreement or arrangement between
any Credit Party or any of its Subsidiaries and one or more Affiliated
Practices pursuant to which such Credit Party or such Subsidiary agrees
to provide or arrange for comprehensive management, administrative and
other non-medical support services to such Affiliated Practice or
Practices in exchange for payment to such Credit Party or such
Subsidiary of a service, management or similar fee.
"Service Agreement Buy-Out" means any payment made by an
Affiliated Practice to a Credit Party in exchange for the termination
of, or the complete or partial release from its obligations under, its
Service Agreement with such Credit Party.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or Multiple
Employer Plan.
19
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, Contingent Obligations and other commitments as they
mature in the normal course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's assets would
constitute unreasonably small capital, (d) the fair value of the assets
of such Person is greater than the total amount of liabilities,
including, without limitation, Contingent Obligations, of such Person
and (e) the value of the assets of such Person at fair valuation or at
present fair saleable valuation is not less than the amount that will
be required to pay the probable liability of such Person on its debts
as they become absolute and matured.
"SPC" has the meaning set forth in Section 11.3(g).
"Spot Rate" means, for any foreign currency, the rate quoted
by Bank of America, in good faith, as the spot rate for the purchase by
Bank of America of such currency with Dollars through its principal
foreign exchange trading office at approximately 11:00 a.m. on the date
two Business Days prior to the date as of which the foreign exchange
computation is made.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
person directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time. Any reference to Subsidiary herein, unless
otherwise identified, shall mean a Subsidiary, direct or indirect, of
the Borrower.
"Target" has the meaning set forth in Section 7.9(b).
"Taxes" has the meaning set forth in Section 3.13(a).
"Term Loan Lender" means any Lender whose Pro Rata Share of
the Term Loan Committed Amount is greater than zero, together with its
successors and permitted assigns.
"Term Loans" has the meaning set forth in Section 2.3(a).
"Term Loan Committed Amount" means TWENTY-FIVE MILLION DOLLARS
($25,000,000).
"Term Notes" means the promissory notes of the Borrower in
favor of each Term Loan Lender evidencing the Term Loans provided
pursuant to Section 2.3, individually or collectively, as appropriate,
as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time and as
evidenced in the form of Exhibit 2.3(d).
"Third Party Payor Arrangements" means any and all
arrangements with Medicare, Medicaid, TRICARE/CHAMPUS and any other
Governmental Authority or quasi-public agency, Blue Cross, Blue Shield,
any managed care plans and organizations including, without limitation,
health maintenance organizations and preferred provider organizations,
private commercial insurance companies and any similar third party
arrangements, plans or programs for payment or reimbursement in
connection with health care services, products or supplies.
"Total Patient Contract Balances" means, as of the last day of
any fiscal quarter, without duplication, the aggregate balance as of
such date of uncollected cash due or to become due (a) under all
Patient Contracts for orthodontic and dental services performed and to
be performed by the Affiliated
20
Practices or (b) under all financing agreements or installment payment
programs with respect to Patient Contracts between patients and the
Borrower and its Subsidiaries, in each case net of a reasonable
allowance for uncollectable amounts and patient prepayments.
"Type" means, with respect to any Loan, its character as a
Base Rate Loan or a Eurodollar Loan.
"Unfunded Pension Liability" means, with respect to any Plan
or Multiemployer Plan, the excess of its benefit liabilities under
Section 4001(a)(16) of ERISA over the current value of its assets,
determined in accordance with the applicable assumptions used for
funding under Section 412 of the Code for the applicable plan year.
"Unused Revolving Commitment" means, for any date of
determination, the amount by which (a) the aggregate Revolving
Committed Amount on such date exceeds (b) the sum of the aggregate
principal amount of outstanding Revolving Loans plus the aggregate
principal amount of outstanding L/C Obligations on such date.
"Wholly Owned" means, with respect to any Subsidiary of the
Borrower, that 100% of the outstanding Capital Stock of such Subsidiary
is owned, directly or indirectly, by the Borrower.
1.2 COMPUTATION OF TIME PERIODS AND OTHER DEFINITIONAL PROVISIONS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 ACCOUNTING TERMS/CALCULATION OF FINANCIAL COVENANTS.
Except as otherwise expressly provided herein, all accounting terms
used herein or incorporated herein by reference shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP applied on a consistent basis.
Notwithstanding anything to the contrary in this Credit Agreement, for purposes
of calculation of the financial covenants set forth in Section 8.14, all
accounting determinations and computations thereunder shall be made in
accordance with GAAP as in effect as of the date of this Credit Agreement
applied on a basis consistent with the application used in preparing the most
recent financial statements of the Credit Parties referred to in Section 5.1(d).
In the event that any changes in GAAP after such date are required to be applied
to the Credit Parties and would affect the computation of the financial
covenants contained in Section 8.14, such changes shall be followed only from
and after the date this Credit Agreement shall have been amended to take into
account any such changes.
1.4 TIME.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight time, as the case may be, unless specified otherwise.
1.5 ROUNDING OF FINANCIAL COVENANTS.
Any financial ratios required to be maintained by the Borrower pursuant
to this Credit Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).
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1.6 REFERENCES TO AGREEMENTS AND REQUIREMENT OF LAWS.
Unless otherwise expressly provided herein: (a) references to
organization documents, agreements (including the Credit Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Credit Document and (b) references
to any Requirement of Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such
Requirement of Law.
SECTION 2
CREDIT FACILITY
2.1 REVOLVING LOANS.
(a) Revolving Committed Amount. Subject to the terms and
conditions set forth herein, each Revolving Lender severally agrees to
make revolving loans (each a "Revolving Loan" and collectively the
"Revolving Loans") in Dollars to the Borrower, at any time and from
time to time, during the period from and including the Closing Date to
but not including the Maturity Date (or such earlier date if the
Revolving Committed Amount has been terminated as provided herein);
provided, however, that after giving effect to any Borrowing (i) the
sum of the aggregate principal amount of outstanding Revolving Loans
plus the aggregate principal amount of outstanding L/C Obligations
shall not exceed the Revolving Committed Amount and (ii) with respect
to each individual Lender, the sum of the aggregate principal amount of
outstanding Revolving Loans of such Lender plus the aggregate principal
amount of outstanding L/C Obligations of such Lender shall not exceed
such Lender's Pro Rata Share of the Revolving Committed Amount. Subject
to the terms of this Credit Agreement (including Section 3.3), the
Borrower may borrow, repay and reborrow Revolving Loans. Revolving
Loans may be Base Rate Loans or Eurodollar Loans, as further provided
herein.
(b) Method of Borrowing for Revolving Loans. By no later than
11:00 a.m. (i) on the date of the requested Borrowing of Revolving
Loans that will be Base Rate Loans and (ii) three Business Days prior
to the date of the requested Borrowing of Revolving Loans that will be
Eurodollar Loans, the Borrower shall telephone the Administrative Agent
as well as submit a written Notice of Borrowing in the form of Exhibit
2.1(b) to the Administrative Agent setting forth (A) the amount
requested, (B) the date of the requested Borrowing, (C) the Type of
Revolving Loan, (D) with respect to Revolving Loans that will be
Eurodollar Loans, the Interest Period applicable thereto, and (E)
certification that the Borrower has complied in all respects with
Section 5.2. If the Borrower shall fail to specify (1) an Interest
Period in the case of a Eurodollar Loan, then such Eurodollar Loan
shall be deemed to have an Interest Period of one month or (2) the Type
of Revolving Loan requested, then such Revolving Loan shall be deemed
to be a Base Rate Loan. All Revolving Loans made on the Closing Date
shall be Base Rate Loans. Thereafter, all or any portion of the
Revolving Loans may be converted into Eurodollar Loans in accordance
with the terms of Section 2.4.
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly inform the Revolving
Lenders as to the terms thereof. Each Revolving Lender shall make its
Pro Rata Share of the requested Revolving Loans available to the
Administrative Agent in Dollars and in immediately available funds at
the Administrative Agent's Office not later than 1:00 p.m. on the
Business Day specified in the applicable Notice of Borrowing. Upon
satisfaction of the conditions set forth in Section 5.2, the amount of
the requested Revolving Loans will then be made available to the
Borrower by the Administrative Agent either by (A) crediting the
account of the Borrower on the books of the Administrative Agent with
the amount of such funds or (B) wire transfer of such funds, in each
case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrower.
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(d) Reductions of Revolving Committed Amount. Upon at least
three Business Days' notice, the Borrower shall have the right to
permanently terminate or reduce the aggregate unused amount of the
Revolving Committed Amount at any time or from time to time; provided
that (i) each partial reduction shall be in an aggregate amount at
least equal to $5,000,000 and in integral multiples of $1,000,000 above
such amount and (ii) no reduction shall be made which would reduce the
Revolving Committed Amount to an amount less than the sum of the
aggregate principal amount of outstanding Revolving Loans plus the
aggregate principal amount of outstanding L/C Obligations. Any
reduction in (or termination of) the Revolving Committed Amount shall
be permanent and may not be reinstated.
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in substantially the form of Exhibit 2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth
herein and other terms and conditions that the L/C Issuer may
reasonably require, (A) the L/C Issuer agrees, in reliance
upon the agreements of the Revolving Lenders set forth in this
Section 2.2, from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit
Expiration Date, to issue standby Letters of Credit in Dollars
for the account of the Borrower or, subject to the terms of
Section 2.2(k), certain Subsidiaries of the Borrower, and to
amend Letters of Credit previously issued by it, in each case
in accordance with subsection (b) below and (B) the Revolving
Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower or, subject to the
terms of Section 2.2(k), certain Subsidiaries of the Borrower;
provided, however, that after giving effect to the issuance of
any Letter of Credit (1) the sum of the aggregate principal
amount of outstanding Revolving Loans plus the aggregate
principal amount of outstanding L/C Obligations shall not
exceed the Revolving Committed Amount, (2) with respect to
each individual Lender, the sum of the aggregate principal
amount of outstanding Revolving Loans of such Lender plus the
aggregate principal amount of outstanding L/C Obligations of
such Lender shall not exceed such Lender's Pro Rata Share of
the Revolving Committed Amount and (3) the aggregate principal
amount of outstanding L/C Obligations shall not at any time
exceed the Letter of Credit Sublimit. Within the foregoing
limits, and subject to the terms and conditions hereof, the
Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed.
(ii) The L/C Issuer shall not issue or amend any
Letter of Credit if:
(A) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any
Requirement of Law applicable to the L/C Issuer or
any request or directive (whether or not having the
force of law) from any Governmental Authority with
jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon
the L/C Issuer with respect to such Letter of Credit
any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed
loss, cost or expense which was not applicable on the
Closing Date and which the L/C Issuer in good xxxxx
xxxxx material to it;
(B) the expiry date of such requested Letter
of Credit would occur more than twelve months after
the date of issuance, unless the Required Lenders
have approved such expiry date;
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(C) the expiry date of such requested Letter
of Credit would occur after the Letter of Credit
Expiration Date, unless all the Revolving Lenders
have approved such expiry date;
(D) the issuance of such Letter of Credit
would violate one or more policies of the L/C Issuer;
or
(E) such Letter of Credit is in an initial
amount less than $100,000 (unless otherwise agreed to
by the L/C Issuer), is to be used for a purpose other
than as permitted by Section 7.11, or is denominated
in a currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to
amend any Letter of Credit if (A) the L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment
to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of
Credit.
(i) Each Letter of Credit shall be issued or amended,
as the case may be, upon the request of the Borrower delivered
to the L/C Issuer (with a copy to the Administrative Agent) in
the form of a Letter of Credit Application, appropriately
completed and signed by a Responsible Officer of the Borrower.
The Letter of Credit Application must be received by the L/C
Issuer and the Administrative Agent not later than 11:00 a.m.
at least two Business Days (or such later date and time as the
L/C Issuer may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of
amendment, as applicable. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to
the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day),
(B) the amount thereof, (C) the expiry date thereof, (D) the
name and address of the beneficiary thereof, (E) the documents
to be presented by such beneficiary in case of any drawing
thereunder, (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing
thereunder and (G) such other matters as the L/C Issuer may
require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to
the L/C Issuer (1) the Letter of Credit to be amended, (2) the
proposed date of amendment thereof (which shall be a Business
Day), (3) the nature of the proposed amendment and (4) such
other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, the L/C
Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from
the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof,
then, subject to the terms and conditions hereof, the L/C
Issuer shall, on the requested date, issue a Letter of Credit
for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with
the L/C Issuer's usual and customary business practices.
(iii) Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising
bank with respect thereto or to the beneficiary thereof, the
L/C Issuer will also deliver to the Borrower and the
Administrative Agent a true and complete copy of such Letter
of Credit or amendment.
24
(c) Participations.
(i) On the Closing Date, each Revolving Lender shall
be deemed to have purchased without recourse a risk
participation from the L/C Issuer in each Existing Letter of
Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal
to its Pro Rata Share of the obligations under such Existing
Letter of Credit, and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and
be obligated to pay to the L/C Issuer therefor and discharge
when due, its Pro Rata Share of the obligations arising under
such Existing Letter of Credit.
(ii) Each Revolving Lender, upon issuance of a Letter
of Credit, shall be deemed to have purchased without recourse
a risk participation from the L/C Issuer in such Letter of
Credit and the obligations arising thereunder and any
collateral relating thereto, in each case in an amount equal
to its Pro Rata Share of the obligations under such Letter of
Credit, and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be obligated
to pay to the L/C Issuer therefor and discharge when due, its
Pro Rata Share of the obligations arising under such Letter of
Credit.
(d) Reimbursement.
(i) In the event of any drawing under any Letter of
Credit, the L/C Issuer will promptly notify the Borrower in
writing. The Borrower shall reimburse the L/C Issuer on the
day of drawing under any Letter of Credit either with the
proceeds of a Revolving Loan obtained hereunder or otherwise
in immediately available funds. If the Borrower shall fail to
reimburse the L/C Issuer as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a
per annum rate equal to the Adjusted Base Rate plus two
percent (2%).
(ii) Subsequent to a drawing under any Letter of
Credit, unless the Borrower shall immediately notify the L/C
Issuer of its intent to otherwise reimburse the L/C Issuer,
the Borrower shall be deemed to have requested a Revolving
Loan at the Adjusted Base Rate in the amount of the drawing as
described herein, the proceeds of which will be used to
satisfy the reimbursement obligations. On any day on which the
Borrower shall be deemed to have requested a Revolving Loan
borrowing to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Revolving
Lenders that a Revolving Loan has been deemed requested in
connection with a drawing under a Letter of Credit, in which
case a Revolving Loan borrowing comprised solely of Base Rate
Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made from all Revolving Lenders (without giving
effect to any termination of the Commitments pursuant to
Section 9.2 or otherwise) pro rata based on each Revolving
Lender's respective Pro Rata Share and the proceeds thereof
shall be paid directly to the L/C Issuer for application to
the respective L/C Obligations. Each Revolving Lender hereby
irrevocably agrees to make such Revolving Loans immediately
upon any such request or deemed request on account of each
such Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date
notwithstanding (A) the amount of Mandatory Borrowing may not
comply with the minimum amount for borrowings of Revolving
Loans otherwise required hereunder, (B) the failure of any
conditions specified in Section 5.2 to have been satisfied,
(C) the existence of a Default or an Event of Default, (D) the
failure of any such request or deemed request for Revolving
Loans to be made by the time otherwise required hereunder, (E)
the date of such Mandatory Borrowing, or (F) any reduction in
the Revolving Committed Amount or any termination of the
Commitments.
(iii) In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each
Revolving Lender hereby agrees that it shall forthwith fund
(as of the date the
25
Mandatory Borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) its Pro Rata Share
in the outstanding L/C Obligations; provided, that in the
event any Revolving Lender shall fail to fund its Pro Rata
Share on the day the Mandatory Borrowing would otherwise have
occurred, then the amount of such Revolving Lender's unfunded
participation interest therein shall bear interest payable to
the L/C Issuer upon demand, at the rate equal to, if paid
within two Business Days of such date, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
Simultaneously with the making of each such payment by a
Revolving Lender to the L/C Issuer, such Revolving Lender
shall, automatically and without any further action on the
part of the L/C Issuer or such Revolving Lender, acquire a
participation in an amount equal to such payment (excluding
the portion of such payment constituting interest owing to the
L/C Issuer) in the related unreimbursed drawing portion of the
L/C Obligation and in the interest thereon and shall have a
claim against the Borrower and the other Credit Parties with
respect thereto. Any payment by the Lenders pursuant to this
clause (iii) shall not relieve or otherwise impair the
obligations of the Borrower or any Credit Party to reimburse
the L/C Issuer under a Letter of Credit.
(e) Obligations Absolute. The obligation of the Borrower to
reimburse the L/C Issuer for each drawing under each Letter of Credit
shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Credit Agreement under
all circumstances, including the following:
(i) any lack of validity or enforceability of such
Letter of Credit, this Credit Agreement, or any other
agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim,
set-off, defense or other right that the Borrower may have at
any time against any beneficiary or any transferee of such
Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Credit
Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other
document presented under such Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter
of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter
of Credit, including any arising in connection with any
proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other
irregularity, the Borrower will immediately notify the L/C Issuer. The
Borrower shall be conclusively deemed to have waived any such claim
against the L/C Issuer and its correspondents unless such notice is
given as aforesaid.
26
(f) Role of L/C Issuer. Each Revolving Lender and the Borrower
agree that, in paying any drawing under a Letter of Credit, the L/C
Issuer shall not have any responsibility to obtain any document (other
than any sight draft, certificates and documents expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of the Person executing
or delivering any such document. None of the L/C Issuer, any
Agent-Related Person nor any of the respective correspondents,
participants or assignees of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at
the request or with the approval of the Revolving Lenders or the
Required Lenders, as applicable, (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit
Application. The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower's pursuing such
rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer,
any Agent-Related Person, nor any of the respective correspondents,
participants or assignees of the L/C Issuer, shall be liable or
responsible for any of the matters described in clauses (i) through (v)
of Section 2.2(e). In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation
and the L/C Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason.
(g) Cash Collateral. If, as of the Letter of Credit Expiration
Date, any Letter of Credit for any reason remains outstanding and
partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then aggregate principal amount of all L/C
Obligations (in an amount equal to such aggregate principal amount
determined as of the Letter of Credit Expiration Date). The Borrower
hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing.
Cash collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly
agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter
of Credit), the rules of the "International Standby Practices 1998"
published by the Institute of International Banking Requirement of Law
& Practice (or such later version thereof as may be in effect at the
time of issuance) and the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International
Chamber of Commerce (the "ICC") at the time of issuance (including the
ICC decision published by the Commission on Banking Technique and
Practice on April 6, 1998 regarding the European single currency
(euro)) shall apply to each Letter of Credit.
(i) Fronting Fee and Documentary and Processing Charges
Payable to L/C Issuer. The Borrower shall pay directly to the L/C
Issuer for its own account a fronting fee with respect to each Letter
of Credit in an amount equal to 0.125% times the daily maximum amount
available to be drawn under such Letter of Credit (the "L/C Fronting
Fee"). The L/C Fronting Fee shall be computed on a quarterly basis in
arrears and shall be due and payable on the last Business Day of each
fiscal quarter of the Borrower (as well as on the Letter of Credit
Expiration Date) for the fiscal quarter (or portion thereof) then
ending, beginning with the first of such dates to occur after the
issuance of such Letter of Credit. In addition, the Borrower shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as
from time to time in effect. Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.
(j) Conflict with Letter of Credit Application. In the event
of any conflict between the terms hereof and the terms of any Letter of
Credit Application, the terms hereof shall control.
27
(k) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, a Letter of Credit issued hereunder may contain a statement
to the effect that such Letter of Credit is issued for the account of a
Subsidiary of the Borrower; provided that notwithstanding such
statement, the Borrower shall be the actual account party for all
purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(l) Indemnification of L/C Issuer.
(i) In addition to its other obligations under this
Credit Agreement, the Credit Parties hereby agree to protect,
indemnify, pay and hold the L/C Issuer harmless from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that the L/C Issuer may incur or be subject
to as a consequence, direct or indirect, of (A) the issuance
of any Letter of Credit or (B) the failure of the L/C Issuer
to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Credit Parties and the L/C
Issuer, the Credit Parties shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. In the absence of gross negligence or willful
misconduct, the L/C Issuer shall not be responsible for: (A)
the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon a Letter of Credit;
(D) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (G) any consequences arising from causes
beyond the control of the L/C Issuer, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the L/C Issuer's
rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the L/C Issuer, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
the L/ C Issuer under any resulting liability to the Borrower
or any other Credit Party. It is the intention of the parties
that this Credit Agreement shall be construed and applied to
protect and indemnify the L/C Issuer against any and all risks
involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Credit Parties,
including, without limitation, any and all risks of the acts
or omissions, whether rightful or wrongful, of any present or
future Government Acts. The L/C Issuer shall not, in any way,
be liable for any failure by the L/C Issuer or anyone else to
pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the
L/C Issuer.
(iv) Nothing in this subsection (l) is intended to
limit the reimbursement obligation of the Borrower contained
in this Section 2.2. The obligations of the Borrower under
this subsection (l) shall survive the termination of this
Credit Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the L/C Issuer to enforce any right,
power or benefit under this Credit Agreement.
28
(m) Letter of Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall
be deemed to mean the maximum face amount of such Letter of Credit
after giving effect to all increases thereof contemplated by such
Letter of Credit or the Letter of Credit Application therefor, whether
or not such maximum face amount is in effect at such time.
2.3 TERM LOANS.
(a) Term Loan Commitment. Subject to the terms and conditions
set forth herein, each Term Loan Lender severally agrees, on the
Closing Date, to make a term loan (each a "Term Loan" and collectively
the "Term Loans") to the Borrower in Dollars in an amount equal to such
Term Loan Lender's Pro Rata Share of the Term Loan Committed Amount;
provided that the aggregate amount of Term Loans made on the Closing
Date shall not exceed the Term Loan Committed Amount. Once repaid, Term
Loans may not be reborrowed.
(b) Funding of Term Loans. On or before 1:00 p.m. on the
Closing Date, each Term Loan Lender will make its Pro Rata Share of the
Term Loan Committed Amount available to the Administrative Agent by
deposit, in Dollars and in immediately available funds, at the
Administrative Agent's Office. The amount of the Term Loans will then
be made available to the Borrower by the Administrative Agent either by
(i) crediting the account of the Borrower on the books of the
Administrative Agent with the amount of such funds or (ii) by wire
transfer of such funds, in each case to the extent the amount of such
Term Loans are made available to the Administrative Agent. All Term
Loans on the Closing Date shall be Base Rate Loans. Thereafter, all or
any portion of the Term Loans may be converted into Eurodollar Loans in
accordance with the terms of Section 2.4.
(c) Amortization. The principal amount of the Term Loans shall
be repaid in quarterly installments as follows, unless accelerated
sooner pursuant to Section 9.2:
PRINCIPAL AMORTIZATION PAYMENT TERM LOAN PRINCIPAL
DATES AMORTIZATION PAYMENT
------------------------------ --------------------
March 31, 2003 $2,083,333.25
June 30, 2003 $2,083,333.25
September 30, 2003 $2,083,333.25
December 31, 2003 $2,083,333.25
March 31, 2004 $2,083,333.25
June 30, 2004 $2,083,333.25
September 30, 2004 $2,083,333.25
December 31, 2004 $2,083,333.25
March 31, 2005 $2,083,333.25
June 30, 2005 $2,083,333.25
September 30, 2005 $2,083,333.25
Maturity Date $2,083,334.25
------------------------------ --------------------
(d) Term Notes. The Term Loan made by each Lender shall be
evidenced by a duly executed promissory note of the Borrower to such
Lender in substantially the form of Exhibit 2.3(d).
29
2.4 CONTINUATIONS AND CONVERSIONS.
Subject to the terms below, the Borrower shall have the option, on any
Business Day prior to the Maturity Date, to continue existing Eurodollar Loans
for a subsequent Interest Period, to convert Base Rate Loans into Eurodollar
Loans or to convert Eurodollar Loans into Base Rate Loans. By no later than
11:00 a.m. (a) on the date of the requested conversion of a Eurodollar Loan to a
Base Rate Loan and (b) three Business Days prior to the date of the requested
continuation of a Eurodollar Loan or conversion of a Base Rate Loan to a
Eurodollar Loan, the Borrower shall provide telephonic notice to the
Administrative Agent, followed promptly by a written Notice of
Continuation/Conversion in the form of Exhibit 2.4, setting forth whether the
Borrower wishes to continue or convert such Loans. Notwithstanding anything
herein to the contrary, (i) except as provided in Section 3.11, Eurodollar Loans
may only be continued or converted into Base Rate Loans on the last day of the
Interest Period applicable thereto, (ii) Eurodollar Loans may not be continued
nor may Base Rate Loans be converted into Eurodollar Loans during the existence
and continuation of a Default or an Event of Default and (iii) any request to
continue a Eurodollar Loan that fails to comply with the terms hereof or any
failure to request a continuation of a Eurodollar Loan at the end of an Interest
Period shall be deemed a request to convert such Eurodollar Loan to a Base Rate
Loan on the last day of the applicable Interest Period; provided that any
failure by the Borrower to adequately continue a Eurodollar Loan that is subject
to an Alternative Rate Agreement shall, on the last day of the applicable
Interest Period, be deemed to have been irrevocably requested by the Borrower to
be continued for an Interest Period of like duration (or such shorter duration
if it would exceed the applicable Alternative Rate Period) unless the
Alternative Rate Lender shall have notified the Administrative Agent that the
Alternative Rate Agreement is no longer in effect for such Eurodollar Loan.
2.5 MINIMUM AMOUNTS.
Each request for a Loan and each conversion or continuation thereof
shall be subject to the requirements that (a) each Eurodollar Loan shall be in a
minimum amount of $3,000,000 and in integral multiples of $1,000,000 in excess
thereof, (b) each Base Rate Loan shall be in a minimum amount of $500,000 and in
integral multiples of $100,000 in excess thereof (or the remaining amount of
outstanding Revolving Loans), and (c) no more than seven Eurodollar Loans shall
be outstanding hereunder at any one time. For the purposes of this Section 2.5,
separate Eurodollar Loans that begin and end on the same date, as well as
Eurodollar Loans that begin and end on different dates, shall all be considered
as separate Eurodollar Loans.
2.6 ALTERNATIVE RATE.
The Borrower may irrevocably request an Alternative Rate Agreement for
all or any portion of a Loan (including continuations thereof during the
Alternative Rate Period) in a principal amount of $5,000,000 or a whole multiple
of $1,000,000 in excess thereof by delivering a Request for Alternative Rate to
the Alternative Rate Lender not later than 10:00 a.m. (a) three Business Days
preceding the first Business Day of a calendar month for a Base Rate Loan, and
(b) five Business Days prior to the first day of the initial Interest Period
during which the Alternative Rate is to apply for a Eurodollar Loan. The
Alternative Rate Lender shall have no obligation to agree to a Request for
Alternative Rate and no Request for Alternative Rate shall be deemed to be
accepted by the Alternative Rate Lender until the Request for Alternative Rate
is accepted in writing by the Alternative Rate Lender. Any Alternative Rate
Agreement will become effective (i) for a Base Rate Loan, on the first Business
Day of a month and (ii) for a Eurodollar Loan, on the first day of the Interest
Period for such Eurodollar Loan within the applicable Alternative Rate Period,
and shall continue in effect, unless earlier terminated as herein provided, for
the Alternative Rate Period applicable thereto.
30
SECTION 3
GENERAL PROVISIONS APPLICABLE
TO LOANS
3.1 INTEREST.
(a) Interest Rate. Subject to Sections 3.1(b) and (c), (i) all
Base Rate Loans shall accrue interest at the Adjusted Base Rate and
(ii) all Eurodollar Loans shall accrue interest at the Adjusted
Eurodollar Rate.
(b) Default Rate of Interest. After the occurrence, and during
the continuation, of an Event of Default, the principal of and, to the
extent permitted by Law, interest on the Loans and any other amounts
owing hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand,
at the Default Rate.
(c) Alternative Rate Interest. Upon the written acceptance of
a Request for Alternative Rate by the Alternative Rate Lender with
respect to a Loan or any portion thereof (including continuations
thereof), the Borrower shall pay interest to the Alternative Rate
Lender for its account on the unpaid principal amount of such Loan or
relevant portion thereof at a rate per annum equal to the Alternative
Rate from the effective date of the Alternative Rate Agreement on each
Interest Payment Date occurring prior to the end of (and including the
last day of) the Alternative Rate Period for such Loan or earlier
termination of the Alternative Rate pursuant to the terms of the
Alternative Rate Agreement or this Credit Agreement (each such payment
to be made in Dollars and in immediately available funds not later than
12:00 noon; provided, however, that each Lender other than the
Alternative Rate Lender shall continue to receive from the
Administrative Agent (after its receipt of payment from the Alternative
Rate Lender as set forth in the immediately following sentence) its Pro
Rata Share of interest on such Loan determined pursuant to Section
3.1(a)). The Lenders agree that to the extent that the Borrower pays
the Alternative Rate on an Interest Payment Date for a Loan or relevant
portion thereof to the Alternative Rate Lender, the Borrower's
obligation to pay interest on such Revolving Loan on such Interest
Payment Date shall have been satisfied and it shall be the
responsibility of the Alternative Rate Lender to pay to the
Administrative Agent for the account of the other Lenders the interest
due on such Revolving Loan determined pursuant to Section 3.1(a) on
such Interest Payment Date. The Borrower and Lenders acknowledge and
agree that (i) the Alternative Rate Lender may, in its sole discretion,
at any time upon the occurrence of any event or condition described in
Section 3.14(b), by notice to the Borrower and the Administrative
Agent, terminate the Alternative Rate Agreement and cause the
Alternative Rate applicable to a Revolving Loan to revert to (A) the
interest rate otherwise applicable to such Revolving Loan determined
pursuant to Section 3.1(a) (the "Original Rate") or (B) the Default
Rate if it would then be applicable to such Loan pursuant to Section
3.1(b), (ii) if, with respect to a Loan as to which an Alternative Rate
is then applicable, the Lenders (other than the Alternative Rate
Lender) shall fail to receive the Original Rate or, if applicable, the
Default Rate for such Loan from the Administrative Agent, the
Alternative Rate shall automatically revert to the Original Rate or, if
applicable, the Default Rate for such Loan and the Alternative Rate
Agreement applicable to such Loan shall, at the discretion of the
Alternative Rate Lender, terminate and (iii) no Lender shall have any
right to any payment or performance from the Alternative Rate Lender
hereunder or otherwise in respect of any Alternative Rate Agreement
other than as provided in the second sentence of this Section 3.1(c).
The Borrower and the Lenders further acknowledge and agree that
notwithstanding the foregoing, in the event that the Default Rate shall
at any time apply to a Loan as to which an Alternative Rate Agreement
remains in effect, the Borrower shall be solely responsible for the
full and timely payment to the Administrative Agent for the account of
the Lenders (including the Alternative Rate Lender) of the amount by
which such Default Rate exceeds the Original Rate.
(d) Interest Payments. Interest on Loans shall be due and
payable in arrears on each Interest Payment Date.
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3.2 PAYMENTS GENERALLY.
(a) No Deductions; Place and Time of Payments. All payments to
be made by the Credit Parties shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. Except
as otherwise expressly provided herein, all payments by the Credit
Parties hereunder shall be made to the Administrative Agent, for the
account of the respective Lenders to which such payment is owed, at the
Administrative Agent's Office in Dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Pro
Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's
Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day
and any applicable interest or fee shall continue to accrue.
(b) Payment Dates. Subject to the definition of "Interest
Period," if any payment to be made by the Borrower shall come due on a
day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected
in computing interest or fees, as the case may be.
(c) Advances by Administrative Agent. Unless the Borrower, the
Alternative Rate Lender or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to
the Administrative Agent hereunder, that the Borrower, the Alternative
Rate Lender or such Lender, as the case may be, will not make such
payment, the Administrative Agent may assume that the Borrower, the
Alternative Rate Lender or such Lender, as the case may be, has timely
made such payment and may (but shall not be so required to), in
reliance thereon, make available a corresponding amount to the Person
entitled thereto. If and to the extent that such payment was not in
fact made to the Administrative Agent in Dollars and in immediately
available funds, then:
(i) if the Borrower or Alternative Rate Lender failed
to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed
payment that was made available to such Lender in Dollars and
in immediately available funds, together with interest thereon
in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent
in immediately available funds at the Federal Funds Rate from
time to time in effect; and
(ii) if any Lender failed to make such payment, such
Lender shall forthwith on demand pay to the Administrative
Agent the amount thereof in Dollars and in immediately
available funds, together with interest thereon for the period
from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount
is recovered by the Administrative Agent (the "Compensation
Period") at a rate per annum equal to the Federal Funds Rate
from time to time in effect. If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute
such Lender's Revolving Loan included in the applicable
Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the
Administrative Agent may make a demand therefor upon the
Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the
Compensation Period at a rate per annum equal to the rate of
interest applicable to such Borrowing. Nothing herein shall be
deemed to relieve any Lender from its obligation to fulfill
its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be
conclusive, absent manifest error.
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(d) Several Obligations. The obligations of the Lenders
hereunder to make Loans and to fund or purchase Participation Interest
are several and not joint. The failure of any Lender to make any Loan
or to fund or purchase any Participation Interest on any date required
hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible
for the failure of any other Lender to so make its Loan or fund its
Participation Interest.
(e) Funding Offices. Nothing herein shall be deemed to
obligate any Lender to obtain the funds for any Loan in any particular
place or manner or to constitute a representation by any Lender that it
has obtained or will obtain the funds for any Loan in any particular
place or manner.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay the Loans in whole or in part from time to time without
premium or penalty; provided, however, that (i) all prepayments under
this Section 3.3(a) shall be subject to Section 3.14, (ii) Eurodollar
Loans may only be prepaid on three Business Days' prior written notice
to the Administrative Agent, (iii) each such partial prepayment of
Eurodollar Loans shall be in the minimum principal amount of $1,000,000
and integral multiples of $500,000 and (iv) each such partial
prepayment of Base Rate Loans shall be in the minimum principal amount
of $500,000 and integral multiples of $100,000 or, in the case of
clauses (iii) and (iv), if less than such minimum amounts, the entire
principal amount thereof then outstanding. Amounts prepaid pursuant to
this Section 3.3(a) shall be applied as the Borrower may elect based on
the Lenders' Pro Rata Shares; provided, however, if the Borrower fails
to specify, such prepayment shall be applied by the Administrative
Agent, subject to Section 3.7, in such manner as it deems reasonably
appropriate.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time (A)
the sum of the aggregate principal amount of Revolving Loans
outstanding plus the aggregate principal amount of L/C
Obligations outstanding exceeds the Revolving Committed Amount
or (B) the aggregate principal amount of L/C Obligations
outstanding exceeds the Letter of Credit Sublimit, the
Borrower shall immediately make a principal payment to the
Administrative Agent and/or Cash Collateralize outstanding L/C
Obligations in a manner and in an amount to be in compliance
with Sections 2.1 and 2.2, as applicable, and as directed by
the Administrative Agent (any such prepayment with respect to
clause (A) above to be applied as set forth in Section 3.3(c)
below).
(ii) Asset Disposition. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any
Asset Disposition, the Borrower shall forward an amount equal
to 100% of the Net Cash Proceeds of such Asset Disposition to
the Administrative Agent (all such prepayments to be applied
as set forth in Section 3.3(c) below); provided, however, the
Borrower shall not be required to forward such Net Cash
Proceeds to the extent such Net Cash Proceeds are reinvested
in accordance with the terms of Section 8.4(g).
(iii) Equity Issuances. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any
Equity Issuance, the Borrower shall forward an amount equal to
50% of the Net Cash Proceeds of such Equity Issuance to the
Administrative Agent (all such prepayments to be applied as
set forth in Section 3.3(c) below).
(iv) Debt Issuances. Immediately upon receipt by a
Credit Party or any of its Subsidiaries of proceeds from any
Debt Issuance, the Borrower shall forward an amount equal to
100% of the Net Cash Proceeds of such Debt Issuance to the
Administrative Agent (all such prepayments to be applied as
set forth in Section 3.3(c) below).
(v) Service Agreement Buy-Outs of Litigating ORAL
Affiliated Practices. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Service
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Agreement Buy-Out with respect to a Litigating ORAL Affiliated
Practice, the Borrower shall forward an amount equal to 35% of
all cash proceeds of any such Service Agreement Buy-Out when
received (whether received at the time of any buy-out or
settlement or subsequently in connection with any sale,
disposition or payment under any promissory note, instrument
or other non-cash consideration) to the Administrative Agent
(all such prepayments to be applied as set forth in Section
3.3(c)).
(c) Application of Prepayments. All amounts required to be
prepaid pursuant to Section 3.3(b)(i)(A) shall be applied first to
Revolving Loans and second to Cash Collateralize outstanding L/C
Obligations. All amounts required to be prepaid pursuant to Sections
3.3(b)(ii), (iii), (iv) and (v) shall be applied first to Principal
Amortization Payments in inverse order of maturity, second to Revolving
Loans and third to Cash Collateralize outstanding L/C Obligations.
Within the parameters of the applications set forth above, prepayments
shall be applied first to Base Rate Loans and second to Eurodollar
Loans in direct order of Interest Period maturities. All prepayments
pursuant to Section 3.3(b) shall be subject to Section 3.14 and shall
be accompanied by the interest on the principal amount prepaid through
the date of prepayment.
3.4 FEES.
(a) Commitment Fees. In consideration of the Revolving
Committed Amount being made available by the Lenders hereunder, the
Borrower agrees to pay to the Administrative Agent, for the pro rata
benefit of each Revolving Lender based on its Pro Rata Share of the
Revolving Committed Amount, a per annum fee equal to the daily average
sum of the Applicable Percentage for Commitment Fees for each day
during the period of determination multiplied by the Unused Revolving
Commitment for each such day (the "Commitment Fees"). The Commitment
Fees shall commence to accrue on the Closing Date and shall be due and
payable in arrears on the last Business Day of each fiscal quarter of
the Borrower (as well as on the Maturity Date and on any date that the
Revolving Committed Amount is reduced) for the fiscal quarter (or
portion thereof) then ending, beginning with the first of such dates to
occur after the Closing Date.
(b) L/C Fees. The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance with its
Pro Rata Share of the Revolving Committed Amount a fee for each
outstanding Letter of Credit equal to the Applicable Percentage for L/C
Fees times the daily maximum amount available to be drawn under such
Letter of Credit (the "L/C Fees"). The L/C Fees shall be computed on a
quarterly basis in arrears and shall be due and payable on the last
Business Day of each fiscal quarter of the Borrower (as well as on the
Letter of Credit Expiration Date) for the fiscal quarter (or portion
thereof) then ending, beginning with the first of such dates to occur
after the issuance of such Letter of Credit.
(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the Borrower and the Administrative Agent (the "Administrative
Fees") in the Fee Letter.
3.5 PAYMENT IN FULL AT MATURITY.
On the Maturity Date, the entire outstanding principal balance of all
Loans, together with accrued but unpaid interest and all fees and other sums
owing under the Credit Documents, including, without limitation, all Credit
Party Obligations shall be due and payable in full, unless accelerated sooner
pursuant to Section 9.2; provided that if the Maturity Date is not a Business
Day, then such principal, interest, fees and other sums shall be due and payable
in full on the next preceding Business Day.
3.6 COMPUTATIONS OF INTEREST AND FEES.
(a) Calculation of Interest. Except for Base Rate Loans that
are based upon the Prime Rate, in which case interest shall be computed
on the basis of the actual number of days elapsed over a year of 365 or
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366 days, as the case may be, all computations of interest and fees
hereunder (including calculation of the Alternative Rate) shall be made
on the basis of the actual number of days elapsed over a year of 360
days. Interest shall accrue from and including the Closing Date or from
the first date of Borrowing (or from any continuation or conversion
thereof) to but excluding the last day occurring in the period for
which such interest is payable.
(b) Usury. It is the intent of the Lenders and the Credit
Parties to conform to and contract in strict compliance with applicable
usury Law from time to time in effect. All agreements between the
Lenders and the Credit Parties are hereby limited by the provisions of
this subsection which shall override and control all such agreements,
whether now existing or hereafter arising and whether written or oral.
In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any Credit Party
Obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable Law. If, from any possible construction of any of the Credit
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall
be subject to the provisions of this subsection and such documents
shall be automatically reduced to the maximum nonusurious amount
permitted under applicable Law, without the necessity of execution of
any amendment or new document. If any Lender shall ever receive
anything of value which is characterized as interest on the Loans under
applicable Law and which would, apart from this provision, be in excess
of the maximum nonusurious amount, an amount equal to the amount which
would have been excessive interest shall, without penalty, be applied
to the reduction of the principal amount owing on the Loans and not to
the payment of interest, or refunded to the Borrower or the other payor
thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right
to demand payment of the Loans or any other Indebtedness evidenced by
any of the Credit Documents does not include the right to accelerate
the payment of any interest which has not otherwise accrued on the date
of such demand, and the Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or
agreed to be paid to the Lenders with respect to the Loans shall, to
the extent permitted by applicable Law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any
renewal or extension) of the Loans so that the amount of interest on
account of the Loans does not exceed the maximum nonusurious amount
permitted by applicable Law.
3.7 PRO RATA TREATMENT.
Except to the extent otherwise provided herein, each Borrowing, each
payment or prepayment of principal of any Revolving Loan, each L/C Credit
Extension, each payment or prepayment of principal of any Term Loan, each
payment of interest (other than with respect to the Alternative Rate Lender),
each payment of fees (other than administrative fees paid to the Administrative
Agent and fronting, documentary and processing fees paid to the L/C Issuer),
each conversion or continuation of any Loans and each reduction in the Revolving
Committed Amount, shall be allocated pro rata among the relevant Lenders in
accordance with their Pro Rata Shares; provided that, if any Lender shall have
failed to pay its Pro Rata Share of any Loan or purchase or fund its
Participation Interest, then any amount to which such Lender would otherwise be
entitled pursuant to this Section 3.7 shall instead be payable to the
Administrative Agent until the share of such Loan or such Participation Interest
not purchased or funded by such Lender has been repaid. In the event any
principal, interest, fee or other amount paid to any Lender pursuant to this
Credit Agreement or any other Credit Document is rescinded or must otherwise be
returned by the Administrative Agent, (a) such principal, interest, fee or other
amount that had been satisfied by such payment shall be revived, reinstated and
continued in full force and effect as if such payment had not occurred and (b)
such Lender shall, upon the request of the Administrative Agent, repay to the
Administrative Agent the amount so paid to such Lender, with interest for the
period commencing on the date such payment is returned by the Administrative
Agent until the date the Administrative Agent receives such repayment at a rate
per annum equal to the Federal Funds Rate if repaid within two (2) Business Days
after such request and thereafter the Base Rate.
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3.8 SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Revolving Loan, any Term Loan, any L/C Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of the Bankruptcy Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Lender under any applicable
Debtor Relief Law or other similar Law or otherwise, or by any other means, in
excess of its Pro Rata Share of such payment as provided for in this Credit
Agreement, such Lender shall promptly pay in cash or purchase from the other
Lenders a participation in such Loans, L/C Obligations and other obligations in
such amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Lenders share such payment in accordance with
their Pro Rata Shares. The Lenders further agree among themselves that if
payment to a Lender obtained by such Lender through the exercise of a right of
setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be returned, each Lender which shall have shared the
benefit of such payment shall, by payment in cash or a repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise returned. The Borrower
agrees that (a) any Lender so purchasing such a participation may, to the
fullest extent permitted by Law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan, L/C Obligations or other
obligation in the amount of such participation and (b) the Credit Party
Obligations that have been satisfied by a payment that has been rescinded or
otherwise returned shall be revived, reinstated and continued in full force and
effect as if such payment had not occurred. Except as otherwise expressly
provided in this Credit Agreement, if any Lender or the Administrative Agent
shall fail to remit to any other Lender an amount payable by such Lender or the
Administrative Agent to such other Lender pursuant to this Credit Agreement on
the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable Debtor Relief
Law or other similar Law, any Lender receives a secured claim in lieu of a
setoff to which this Section 3.8 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 3.8 to share in the
benefits of any recovery on such secured claim.
3.9 CAPITAL ADEQUACY.
If any Lender reasonably determines that the introduction after the
Closing Date of any Law, rule or regulation or other Requirement of Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has or
would have the effect of reducing the rate of return on the capital or assets of
such Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender's desired return on capital), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for any such reduction actually incurred.
3.10 EURODOLLAR PROVISIONS.
If the Administrative Agent reasonably determines (which determination
shall be conclusive and binding upon the Borrower) in connection with any
request for a Eurodollar Loan or a conversion to or continuation thereof that
(a) deposits in Dollars are not being offered to banks in the applicable
offshore interbank market for the applicable amount and Interest Period of such
Eurodollar Loan, (b) adequate and reasonable means do not exist for determining
the Eurodollar Rate for such Eurodollar Loan, or (c) the Eurodollar Rate for
such Eurodollar Loan does not adequately and fairly reflect the cost to the
Lenders of funding such Eurodollar Loan, the Administrative Agent will promptly
notify the Borrower and the Lenders. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Loans shall be suspended until the Administrative
Agent revokes such notice. Upon receipt of such notice, the Borrower may revoke
any pending Notice of Borrowing or Notice of Continuation/Conversion with
respect to Eurodollar Loans or, failing that, will be deemed to have converted
such request into a request for a
36
Borrowing of or, to the extent permitted hereunder, conversion into a Base Rate
Loan in the amount specified therein.
3.11 ILLEGALITY.
If any Lender reasonably determines that any Requirement of Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Loans in Dollars, or materially restricts the authority of such
Lender to purchase or sell, or to take deposits of, Dollars in the applicable
interbank market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Loans or to convert Base Rate Loans to Eurodollar Loans shall be
suspended until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, the Borrower shall, upon demand to the Borrower from
such Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Loans of such Lender to Base Rate Loans, either on the
last day of the Interest Period thereof, if such Lender may lawfully continue to
maintain such Eurodollar Loans to such day, or immediately, if such Lender may
not lawfully continue to maintain such Eurodollar Loans. Upon any such
prepayment or conversion, the Borrower shall also pay interest on the amount so
prepaid or converted, together with any amounts due with respect thereto
pursuant to Section 3.14.
3.12 REQUIREMENTS OF LAW; RESERVES ON EURODOLLAR LOANS.
(a) Changes in Law. If any Lender reasonably determines that
as a result of the introduction of or any change in, or in the
interpretation of, any Requirement of Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Loans, or
a reduction in the amount received or receivable by such Lender in
connection with any of the foregoing (excluding for purposes of this
Section 3.12 any such increased costs or reduction in amount resulting
from (i) Taxes or Other Taxes (as to which Section 3.13 shall govern)
and (ii) reserve requirements contemplated by subsection (b) below),
then from time to time, upon demand of such Lender (through the
Administrative Agent), the Borrower shall pay to such Lender such
additional amounts as will compensate such Lender for such increased
cost or reduction in yield.
(b) Reserves. The Borrower shall pay to each Lender (to the
extent such Lender has not otherwise been compensated therefor
hereunder), as long as such Lender shall be required to maintain
reserves with respect to liabilities or assets consisting of or
including eurocurrency funds or deposits (currently known as
"eurocurrency liabilities"), additional interest on the unpaid
principal amount of each Eurodollar Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive
absent demonstrable error), which shall be due and payable on each date
on which interest is payable on such Loan; provided that the Borrower
shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If
a Lender fails to give notice 15 days prior to the relevant Interest
Payment Date, such additional interest shall be due and payable 15 days
from receipt of such notice.
3.13 TAXES.
(a) Payment of Taxes. Any and all payments by a Credit Party
to or for the account of the Administrative Agent or any Lender under
any Credit Document shall be made free and clear of and without
deduction for any and all present or future income, stamp or other
taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect
thereto, but excluding, in the case of the Administrative Agent and
each Lender, taxes imposed on or measured by its net income, and
franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of
which the Administrative Agent or such Lender, as the case may be, is
organized or maintains its Lending Office (all such non-excluded
present or future income, stamp or other taxes,
37
duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and liabilities being hereinafter referred to as
"Taxes"). If a Credit Party shall be required by any Requirement of Law
to deduct any Taxes from or in respect of any sum payable under any
Credit Document to the Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 3.13(a)), the Administrative Agent or such
Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Credit
Party shall make such deductions, (iii) such Credit Party shall pay the
full amount deducted to the relevant taxation authority or other
Governmental Authority in accordance with applicable Requirements of
Law, and (iv) within 30 days after the date of such payment, such
Credit Party shall furnish to the Administrative Agent (which shall
forward the same to such Lender, if applicable) the original or a
certified copy of a receipt evidencing payment thereof, to the extent
such receipt is issued therefor, or other written proof of payment
thereof that is reasonably satisfactory to the Administrative Agent.
(b) Additional Taxes. In addition, each Credit Party agrees to
pay any and all present or future stamp, court or documentary taxes and
any other excise or property taxes or charges or similar levies which
arise from any payment made under any Credit Document or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Credit Document (hereinafter referred to
as "Other Taxes").
(c) No Deduction for Taxes. If a Credit Party shall be
required to deduct or pay any Taxes or Other Taxes from or in respect
of any sum payable under any Credit Document to the Administrative
Agent or any Lender, such Credit Party shall also pay to the
Administrative Agent (for the account of such Lender) or to such
Lender, at the time interest is paid, such additional amount that such
Lender specifies as necessary to preserve the after-tax yield (after
factoring in all taxes, including taxes imposed on or measured by net
income) such Lender would have received if such Taxes or Other Taxes
had not been imposed.
(d) Indemnification. Each Credit Party agrees to indemnify the
Administrative Agent and each Lender for (i) the full amount of Taxes
and Other Taxes (including any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section 3.13(d)) paid
by the Administrative Agent and such Lender, and (ii) any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto.
(e) Exemption from Taxes. In the case of any payment hereunder
or under any other Credit Document by or on behalf of a Credit Party
through an account or branch outside the United States, or on behalf of
a Credit Party by a payor that is not a United States person, if such
Credit Party determines that no taxes are payable in respect thereof,
such Credit Party shall furnish, or shall cause such payor to furnish,
to the Administrative Agent, an opinion of counsel reasonably
acceptable to the Administrative Agent stating that such payment is
exempt from Taxes. For purposes of this subsection (e), the terms
"United States" and "United States person" shall have the meanings
specified in Section 7701 of the Code.
(f) Foreign Lenders. Each Lender that is a foreign
corporation, foreign partnership or foreign trust within the meaning of
the Code shall deliver to the Administrative Agent, prior to receipt of
any payment subject to withholding under the Code, two duly signed
completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Lender
by the Credit Parties pursuant to this Credit Agreement), as
appropriate, or IRS Form W-8ECI or any successor thereto (relating to
all payments to be made to such Lender by a Credit Party pursuant to
this Credit Agreement) or such other evidence satisfactory to the
Borrower and the Administrative Agent that such Lender is entitled to
an exemption from, or reduction of, United States withholding tax.
Thereafter and from time to time, each such Lender shall (i) promptly
submit to the Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be
adopted from time to time by the relevant United States taxing
authorities), as appropriate, as may reasonably be requested by the
Borrower or the Administrative Agent and then be available under then
current United States Laws and regulations to avoid,
38
or such evidence as is satisfactory to the Borrower and the
Administrative Agent of any available exemption from or reduction of,
United States withholding taxes in respect of all payments to be made
to such Lender by the Borrower pursuant to this Credit Agreement, (ii)
promptly notify the Administrative Agent of any change in circumstances
which would modify or render invalid any claimed exemption or
reduction, and (iii) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including the re-designation of its
Lending Office) to avoid any Requirement of Law that the Credit Parties
make any deduction or withholding for taxes from amounts payable to
such Lender. If the forms or other evidence provided by such Lender at
the time such Lender first becomes a party to this Credit Agreement
indicate a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at
such lesser rate only shall be considered excluded from Taxes for
periods governed by such forms; provided, however, that, if at the date
of any assignment pursuant to which a Lender becomes a party to this
Credit Agreement, the assignor Lender was entitled to payments under
Section 3.13(a) in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term
Taxes shall include (in addition to withholding taxes that may be
imposed in the future or other amounts otherwise includable in Taxes)
United States withholding tax, if any, applicable with respect to the
assignee Lender on such date. If such Lender fails to deliver the above
forms or other evidence, then the Administrative Agent may withhold
from any interest payment to such Lender an amount equal to the
applicable withholding tax imposed by Sections 1441 and 1442 of the
Code, without reduction. If any Governmental Authority asserts that the
Administrative Agent did not properly withhold any tax or other amount
from payments made in respect of such Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties
and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section 3.13(f), and
costs and expenses (including the reasonable fees and expenses of legal
counsel) of the Administrative Agent. For any period with respect to
which a Lender has failed to provide the Borrower with the above forms
or other evidence (other than if such failure is due to a change in the
applicable Law, or in the interpretation or application thereof,
occurring after the date on which such form or other evidence
originally was required to be provided or if such form or other
evidence otherwise is not required), such Lender shall not be entitled
to indemnification under subsection (a) or (c) of this Section 3.13
with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender become subject to
Taxes because of its failure to deliver such form or other evidence
required hereunder, the Borrower shall take such steps as such Lender
shall reasonably request to assist such Lender in recovering such
Taxes. The obligation of the Lenders under this Section 3.13(f) shall
survive the payment of all Credit Party Obligations and the resignation
or replacement of the Administrative Agent.
(g) Reimbursement. In the event that an additional payment is
made under Section 3.13(a) or (c) for the account of any Lender and
such Lender, in its reasonable judgment, determines that it has finally
and irrevocably received or been granted a credit against or release or
remission for, or repayment of, any tax paid or payable by it in
respect of or calculated with reference to the deduction or withholding
giving rise to such payment, such Lender shall, to the extent that it
determines that it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to the
Borrower such amount as such Lender shall, in its reasonable judgment,
have determined to be attributable to such deduction or withholding and
which will leave such Lender (after such payment) in no worse position
than it would have been in if the Borrower had not been required to
make such deduction or withholding. Nothing herein contained shall
interfere with the right of a Lender to arrange its tax affairs in
whatever manner it thinks fit nor oblige any Lender to claim any tax
credit or to disclose any information relating to its tax affairs or
any computations in respect thereof or require any Lender to do
anything that would prejudice its ability to benefit from any other
credits, reliefs, remissions or repayments to which it may be entitled.
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3.14 COMPENSATION / ALTERNATIVE RATE BREAKAGE AMOUNT.
(a) Eurodollar Loans. Upon the written demand of any Lender, the Credit
Parties shall promptly compensate such Lender for and hold such Lender harmless
from any loss, cost or expense incurred by it as a result of:
(i) any continuation, conversion, payment or prepayment of any
Eurodollar Loan on a day other than the last day of the Interest Period
for such Eurodollar Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(ii) any failure by a Borrower (for a reason other than the
failure of such Lender to make a Eurodollar Loan) to prepay, borrow,
continue or convert any Eurodollar Loan on the date or in the amount
previously requested by such Borrower.
The amount each such Lender shall be compensated pursuant to this Section
3.14(a) shall include, without limitation, (A) any loss incurred by such Lender
in connection with the re-employment of funds prepaid, repaid, not borrowed or
paid, as the case may be, (B) any foreign exchange loss and (C) any reasonable
out-of-pocket expenses (including the reasonable fees and expenses of legal
counsel) incurred and reasonably attributable thereto.
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.14(a), (A) each Lender shall be deemed to have
funded each Eurodollar Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the applicable offshore interbank market
for Dollars for a comparable amount and for a comparable period, whether or not
such Eurodollar Loan was in fact so funded and (B) each Lender shall calculate
such amounts in a manner that is customary for such Lender with respect to other
borrowers of such Lender.
(b) Alternative Rate Breakage Costs. Upon demand of the Alternative
Rate Lender from time to time, the Borrower shall promptly compensate the
Alternative Rate Lender for and hold the Alternative Rate Lender harmless from
any Alternative Rate Breakage Amount incurred by it as a result of any of the
following, whether such events or failures are voluntary by the Borrower or are
mandatory, involuntary or automatic occurrences pursuant to the terms of this
Credit Agreement or otherwise:
(i) any continuation, conversion, payment or prepayment of any
Loan (or portion thereof) during an Alternative Rate Period applicable
to such Loan other than continuation to successive Interest Periods as
permitted hereunder;
(ii) any failure to consummate an Alternative Rate Agreement,
or to borrow the Loan described in the Alternative Rate Agreement, on
the date notified by Borrower;
(iii) any Loan (or portion thereof) as to which an Alternative
Rate Agreement is in effect not being continued to successive Interest
Periods of like duration during the applicable Alternative Rate Period;
(iv) the occurrence of any event or condition described in
Sections 3.9, 3.10, 3.11, 3.12 or 3.13 which causes a change in, or
suspension or termination of, the Original Rate otherwise applicable to
any Loan subject to an Alternative Rate Agreement; or
(v) the occurrence of any Event of Default which shall not
have been waived.
3.15 DETERMINATION AND SURVIVAL OF PROVISIONS.
All determinations by the Administrative Agent or a Lender of amounts
owing under Sections 3.9 through 3.14, inclusive, shall, absent inaccuracies or
errors, be conclusive and binding on the parties hereto and all amounts owing
thereunder shall be due and payable within ten Business Days of demand therefor.
In determining such
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amount, the Administrative Agent or such Lender may use any reasonable averaging
and attribution methods. Section 3.9 through 3.14, inclusive, shall survive the
termination of this Credit Agreement and the payment of all Credit Party
Obligations.
SECTION 4
GUARANTY
4.1 GUARANTY OF PAYMENT.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, each Affiliate of a
Lender that enters into a Hedging Agreement and the Administrative Agent the
prompt payment of the Credit Party Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise) and
the timely performance of all other obligations under the Credit Documents and
such Hedging Agreements. This Guaranty is a guaranty of payment and not of
collection and is a continuing guaranty and shall apply to all Credit Party
Obligations whenever arising.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or the Hedging Agreements, or any
other agreement or instrument referred to therein, to the fullest extent
permitted by applicable Law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor. Each Guarantor agrees that this Guaranty may be enforced by
the Lenders without the necessity at any time of resorting to or exhausting any
other security or collateral and without the necessity at any time of having
recourse to the Revolving Notes, the Term Notes or any other of the Credit
Documents or any collateral, if any, hereafter securing the Credit Party
Obligations or otherwise and each Guarantor hereby waives the right to require
the Lenders to proceed against the Borrower or any other Person (including a
co-guarantor) or to require the Lenders to pursue any other remedy or enforce
any other right. Each Guarantor further agrees that it shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Credit Party Obligations for amounts paid under this
Guaranty until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full and all Commitments under the
Credit Agreement have been terminated. Each Guarantor further agrees that
nothing contained herein shall prevent the Administrative Agent or the Lenders
from exercising remedies hereunder or under any of the other Credit Documents or
any of the Hedging Agreements, or foreclosing their security interest in or Lien
on the Collateral securing the Credit Party Obligations, or from exercising any
other rights available to them under this Credit Agreement, the Revolving Notes,
the Term Notes, any other of the Credit Documents, or any other instrument of
security, if any, and the exercise of any of the aforesaid rights and the
completion of any foreclosure proceedings shall not constitute a discharge of
any Guarantor's obligations hereunder; it being the purpose and intent of each
Guarantor that its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Neither any Guarantor's
obligations under this Guaranty nor any remedy for the enforcement thereof shall
be impaired, modified, changed or released in any manner whatsoever by an
impairment, modification, change, release or limitation of the liability of the
Borrower or by reason of the bankruptcy or insolvency of the Borrower. Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Credit Party Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon this Guaranty or
acceptance of this Guaranty. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty. All
dealings between the Borrower and the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty. The Guarantors further agree to all rights of set-off as set forth in
Section 11.2 and agree that their obligations are secured pursuant to the
Collateral Documents.
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4.3 MODIFICATIONS.
Each Guarantor agrees that (a) all or any part of the Collateral, if
any, now or hereafter held for the Credit Party Obligations, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
Liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the Properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Revolving Notes, the Term Notes or any of the other Credit Documents may
be modified, amended or waived; (f) any party (including any co-guarantor)
liable for the payment thereof may be granted indulgences or be released; and
(g) any deposit balance for the credit of the Borrower or any other party liable
for the payment of the Credit Party Obligations or liable upon any security
therefor may be released, in whole or in part, at, before or after the stated,
extended or accelerated maturity of the Credit Party Obligations, all without
notice to or further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
4.4 WAIVER OF RIGHTS.
Each Guarantor expressly waives to the fullest extent permitted by
applicable Law: (a) notice of acceptance of this Guaranty by the Administrative
Agent and the Lenders and of all Revolving Loans and Term Loans made to the
Borrower by the Lenders; (b) presentment and demand for payment or performance
of any of the Credit Party Obligations; (c) protest and notice of dishonor or of
default (except as specifically required in the Credit Agreement) with respect
to the Credit Party Obligations or with respect to any security therefor; (d)
notice of the Lenders obtaining, amending, substituting for, releasing, waiving
or modifying any security interest, Lien or encumbrance, if any, hereafter
securing the Credit Party Obligations, or the Lenders' subordinating,
compromising, discharging or releasing such security interests, Liens or
encumbrances, if any; and (e) all other notices to which such Guarantor might
otherwise be entitled.
4.5 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including the reasonable fees and expenses of legal counsel) incurred
by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar Law.
4.6 REMEDIES.
The Guarantors agree that, as between the Guarantors, on the one hand,
and the Administrative Agent and the Lenders, on the other hand, the Credit
Party Obligations may be declared to be forthwith due and payable as provided in
Section 9.2 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9.2) notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing such Credit
Party Obligations from becoming automatically due and payable) as against any
other Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors.
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4.7 LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal Law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable Law (whether federal or state or otherwise and including,
without limitation, the Bankruptcy Code).
4.8 RIGHTS OF CONTRIBUTION.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable Law. Such
contribution rights shall be subordinate and subject in right of payment to the
obligations of the Credit Parties under the Credit Documents and no Credit Party
shall exercise such rights of contribution until all Credit Party Obligations
have been paid in full and the Commitments terminated.
SECTION 5
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Revolving Loans and to make the Term Loans is subject to
satisfaction of the following conditions:
(a) Executed Credit Documents. Receipt by the Administrative
Agent of duly executed copies of: (i) this Credit Agreement; (ii) the
Revolving Notes; (iii) the Term Notes, (iv) the Collateral Documents,
and (v) all other Credit Documents, each in form and substance
reasonably acceptable to the Lenders in their sole discretion.
(b) Authority Documents. Receipt by the Administrative Agent
of the following with respect to each Credit Party:
(i) Organizational Documents. Copies of the
Organizational Documents of such Credit Party certified to be
true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of
its formation (to the extent filed with such Governmental
Authority) and certified by a secretary or assistant secretary
(or the equivalent) of such Credit Party to be true and
correct as of the Closing Date.
(ii) Resolutions. Copies of resolutions of the Board
of Directors or other governing body of such Credit Party
approving and adopting this Credit Agreement and the other
Credit Documents to which it is a party, the transactions
contemplated herein and therein and authorizing execution and
delivery hereof and thereof, certified by a secretary or
assistant secretary (or the equivalent) of such Credit Party
to be true and correct and in full force and effect as of the
Closing Date.
(iii) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to such
Credit Party certified as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of
its formation.
(iv) Incumbency. An incumbency certificate of such
Credit Party certified by a secretary or assistant secretary
(or the equivalent) of such Credit Party to be true and
correct as of the Closing Date.
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(c) Opinions of Counsel. Receipt by the Administrative Agent
of opinions of counsel from outside counsel to the Credit Parties, in
form and substance acceptable to the Administrative Agent, addressed to
the Administrative Agent and the Lenders and dated as of the Closing
Date, including, without limitation, authority, enforceability and lien
issues and an opinion of Tomotsune and Kimura on behalf of OCA Japan
Co., Ltd.
(d) Financial Statements. Receipt by the Administrative Agent
of (i) the financial statements referenced in Section 6.11(a), (ii) the
Projections and (iii) such additional financial statements, information
and projections regarding the Credit Parties and their Subsidiaries as
the Administrative Agent may request, in each case in form and
substance reasonably satisfactory to the Administrative Agent.
(e) Due Diligence. The Administrative Agent and the Lenders
shall have completed all due diligence with respect to the Credit
Parties, their Subsidiaries and the Affiliated Practices, and the
transactions contemplated by this Credit Agreement and the other Credit
Documents, in scope and determination reasonably satisfactory to the
Administrative Agent and the Lenders.
(f) Material Adverse Effect. Since December 31, 2001, there
shall have been no development or event relating to or affecting a
Credit Party or any of its Subsidiaries that has had or could be
reasonably expected to have a Material Adverse Effect and no material
adverse change has occurred in the business, assets, liabilities
(actual or contingent), operations, condition (financial or otherwise)
or prospects of the Credit Parties and their Subsidiaries taken as a
whole or in the facts and information regarding the Credit Parties and
their Subsidiaries as represented to date.
(g) Absence of Market Disruption. There shall not have
occurred a material adverse change in or material disruption of
conditions in the financial, banking or capital markets which could
reasonably be expected to have a material adverse effect on the
syndication of the Credit Agreement.
(h) Litigation. There shall not exist any material order,
decree, judgment, ruling or injunction or any material pending or
threatened action, suit, investigation or proceeding against the Credit
Parties and their Subsidiaries taken as a whole or, to the knowledge of
any Credit Party after due inquiry, any Affiliated Practice (other than
in each case as disclosed in the Borrower's public filings with the
Securities and Exchange Commission or as disclosed in writing to the
Lenders).
(i) Consents. Receipt by the Administrative Agent of evidence
that all necessary governmental, shareholder and third party consents
and approvals, if any, with respect to this Credit Agreement and the
Credit Documents and the transactions contemplated herein and therein
have been received and no condition or Requirement of Law exists which
would reasonably be likely to restrain, prevent or impose any material
adverse conditions on the transactions contemplated hereby and by the
other Credit Documents.
(j) Officer's Certificates. Receipt by the Administrative
Agent of a certificate or certificates executed by an Authorized
Officer of the Borrower as of the Closing Date stating that (i) the
Credit Parties and each of their Subsidiaries are in compliance in all
material respects with all existing material financial obligations and
all material Requirements of Law, (ii) there does not exist any
material order, decree, judgment, ruling or injunction or any material
pending or threatened action, suit, investigation or proceeding against
the Credit Parties and their Subsidiaries taken as a whole or, to the
knowledge of any Credit Party, any Affiliated Practice (other than in
each case as disclosed in the Borrower's public filings with the
Securities and Exchange Commission or as disclosed in writing to the
Lenders), (iii) the financial statements and information delivered to
the Administrative Agent on or before the Closing Date were prepared in
good faith and in accordance with GAAP and (iv) immediately after
giving effect to this Credit Agreement, the other Credit Documents and
all the transactions contemplated herein or therein to occur on such
date, (A) each Credit Party is Solvent and the Credit Parties and their
Subsidiaries taken as a whole are Solvent, (B) no Default or Event of
Default exists, (C) all representations and warranties contained herein
and in the other Credit Documents are true and correct in all material
respects, (D) since December 31, 2001, there has been no development or
event relating to or affecting a Credit Party or any of its
Subsidiaries that has had or
44
could be reasonably expected to have a Material Adverse Effect and
there exists no event, condition or state of facts that could result in
or reasonably be expected to result in a Material Adverse Change and
(E) the Credit Parties are in compliance with each of the financial
covenants set forth in Section 8.14 as of (1) September 30, 2002 and
(2) the Closing Date, on a Pro Forma Basis, after giving effect to the
transactions contemplated by the Credit Documents, in each case as
demonstrated in Covenant Compliance Worksheets attached to such
certificate.
(k) Collateral. Receipt by the Administrative Agent of the
following (in form and substance satisfactory to the Administrative
Agent):
(i) searches of Uniform Commercial Code filings in
the jurisdiction of the state of organization of each Credit
Party (and jurisdiction of chief executive office for those
Credit Parties organized prior to January 1, 2002), copies of
the financing statements on file in such jurisdictions and
evidence that no Liens exist with respect to the Collateral
other than Permitted Liens, including, without limitation,
termination of any existing UCC financing statements;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's reasonable discretion, to perfect the
Lenders' security interest in the Collateral;
(iii) receipt by the Collateral Agent of (A) all
stock certificates and Intercompany Notes evidencing the
Collateral pledged to the Lenders pursuant to the Pledge and
Security Agreement and (B) duly executed allonges and in blank
undated stock powers with respect to such Intercompany Notes
and stock certificates; and
(iv) such other collateral documentation as may be
required by the Administrative Agent in its sole reasonable
discretion in order to perfect and protect the Lenders'
security interest in the Collateral.
(l) Payoff Letters. Receipt by the Administrative Agent of
payoff letters with respect to the Existing Credit Agreement and the
Bridge Credit Agreement, in form and substance reasonably satisfactory
to the Administrative Agent.
(m) Fees and Expenses. Unless waived by the Person entitled
thereto, payment by the Credit Parties of all fees and expenses owed by
them to the Administrative Agent, the Arranger and the Lenders on or
before the Closing Date, including, without limitation, those fees as
set forth in the Fee Letter.
(n) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Revolving Loans and the L/C Issuer shall
not be obligated to issue Letters of Credit unless:
(a) Notice. The Borrower shall have delivered (i) in the case
of any new Revolving Loan, a Notice of Borrowing, duly executed and
completed, by the time specified in Section 2.1 and (ii) in the case of
any Letter of Credit, a Letter of Credit Application, duly executed and
completed, by the time specified in Section 2.2.
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true
and correct in all material respects at and as if made as of such date
except to the extent they expressly relate to an earlier date.
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(c) No Default. No Default or Event of Default shall exist and
be continuing either prior to or after giving effect to such Credit
Extension.
(d) Availability. Immediately after giving effect to such
Credit Extension (and the application of the proceeds thereof), (i) the
sum of the aggregate principal amount of outstanding Revolving Loans
plus the aggregate principal amount of outstanding L/C Obligations
shall not exceed the Revolving Committed Amount, (ii) with respect to
each individual Lender, the outstanding principal amount of such
Lender's Revolving Loans and L/C Obligations shall not exceed such
Lender's Pro Rata Share of the Revolving Committed Amount and (iii) the
aggregate amount of L/C Obligations outstanding shall not exceed the
Letter of Credit Sublimit.
(e) Pro Forma Compliance with Financial Covenants. Immediately
after giving effect to such Credit Extension (and the application of
the proceeds thereof), the Credit Parties will be in compliance, on a
Pro Forma Basis, with each of the financial covenants set forth in
Section 8.14, as set forth in the Notice of Borrowing.
The delivery of each Notice of Borrowing or Letter of Credit Application shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), (d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Credit
Agreement and to induce the Lenders to provide the Credit Extensions, each of
the Credit Parties represents and warrants to the Agents and the Lenders as
follows:
6.1 CORPORATE ORGANIZATION AND POWER.
Each of the Credit Parties and their Subsidiaries (other than any De
Minimis Subsidiary) (a) is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation, (b) has
the full corporate power and authority to execute, deliver and perform the
Credit Documents to which it is or will be a party, to own and hold its property
and to engage in its business as presently conducted, and (c) is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the nature of its business or the ownership of its properties
requires it to be so qualified, except where the failure to be in good standing
or to be so qualified would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect.
6.2 AUTHORIZATION; ENFORCEABILITY.
Each of the Credit Parties and their Subsidiaries has taken all
necessary corporate action to execute, deliver and perform each of the Credit
Documents to which it is a party and has validly executed and delivered each of
the Credit Documents to which it is a party. Each of the Credit Documents
constitute the legal, valid and binding obligation of each of the Credit Parties
and their Subsidiaries that is a party thereto, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting creditors' rights generally, by general equitable principles or by
principles of good faith and fair dealing. To ensure the legality, validity,
enforceability or admissibility in evidence of each such Credit Document in such
jurisdiction, it is not necessary that any such Credit Document or any other
document be filed or recorded with any court or other authority of such
jurisdiction or that any stamp or similar tax be paid on or in respect of any
such Credit Document.
6.3 NO VIOLATION.
The execution, delivery and performance by each of the Credit Parties
and their Subsidiaries of this Credit Agreement and each of the other Credit
Documents to which it is or will be a party, and compliance by it with the
46
terms hereof and thereof, do not and will not (a) violate any provision of its
Organizational Documents or contravene any other Requirement of Law applicable
to it, (b) conflict with, result in a breach of or constitute (with notice,
lapse of time or both) a default under any indenture, agreement or other
instrument to which it is a party, by which it or any of its properties is bound
or to which it is subject, (c) result in a Limitation on any Licenses applicable
to the business, operations or properties of a Credit Party or any of its
Subsidiaries or adversely affect the ability of a Credit Party or any of its
Subsidiaries to participate in any Third Party Payor Arrangement, or (d) except
for the Liens granted in favor of the Collateral Agent pursuant to the Pledge
and Security Agreement, result in or require the creation or imposition of any
Lien upon any of its properties or assets. No Subsidiary of the Borrower is a
party to any agreement or instrument or otherwise subject to any restriction or
encumbrance that restricts or limits its ability to make dividend payments or
other distributions in respect of its Capital Stock, to repay Indebtedness owed
to the Borrower or any other Subsidiary, to make loans or advances to the
Borrower or any other Subsidiary, or to transfer any of its assets or properties
to the Borrower or any other Subsidiary, in each case other than such
restrictions or encumbrances existing under or by reason of the Credit Documents
or applicable Law or as expressly permitted under Section 8.10.
6.4 GOVERNMENTAL AND THIRD-PARTY AUTHORIZATION; PERMITS.
(a) Consents. No consent, approval, authorization or other
action by, notice to, or registration or filing with, any Governmental
Authority or other Person is or will be required as a condition to or
otherwise in connection with the due execution, delivery and
performance by each of the Credit Parties and their Subsidiaries of
this Credit Agreement or any of the other Credit Documents to which it
is or will be a party or the legality, validity or enforceability
hereof or thereof.
(b) Permits/Licenses. Each of the Credit Parties and their
Subsidiaries and, to the knowledge of the Credit Parties, each
Affiliated Practice, has, and is in good standing with respect to, all
governmental approvals, permits and other Licenses and (to the extent
applicable) all Reimbursement Approvals necessary to conduct its
business as presently conducted and to own or lease and operate its
properties, except for those the failure to obtain which would not be
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect. There is no pending or, to the knowledge of the Credit
Parties, threatened Limitation of any such approval, permit or other
License or Reimbursement Approval of any Credit Party or any Subsidiary
or, to the knowledge of the Credit Parties, any Affiliated Practice,
except for such Limitations as would not be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect. No
Medicare or Medicaid certifications are required for the operation of
the business of any Credit Party or any of its Subsidiaries, and
neither any Credit Party nor any Subsidiary is required to have entered
into any Medicare or Medicaid provider agreement for the operation of
its business. To the knowledge of the Credit Parties, no Affiliated
Practice is required to have entered into any Medicare provider
agreement for the operation of its business. To the knowledge of the
Credit Parties, each Affiliated Practice that participates in Medicaid
is in good standing with respect to such participation and its provider
agreement is in full force and effect.
6.5 LITIGATION.
No litigation, governmental investigation, injunction, order, claim,
bankruptcy or insolvency affecting or relating to any Credit Party or any of its
Subsidiaries, any such Person's properties or revenues, any Service Agreement to
which such Person is a party is pending or, to the best knowledge of the Credit
Parties, threatened, at Law, in equity, in arbitration or otherwise, (a) by or
against any Credit Party or any of its Subsidiaries or against any of its or
their respective properties or revenues that has not been settled, dismissed,
vacated, discharged or terminated, which, if adversely determined, has had or
would likely have a Material Adverse Effect or (b) with respect to this Credit
Agreement or any other Credit Document, and no judgments are outstanding which
has had or would likely have a Material Adverse Effect.
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6.6 TAXES.
Each of the Credit Parties and their Subsidiaries has timely filed all
federal, state and local tax returns and reports required to be filed by it and
has paid all taxes, assessments, fees and other charges levied upon it or upon
its properties that are shown thereon as due and payable, other than those that
are being contested in good faith and by proper proceedings and for which
adequate reserves have been established in accordance with GAAP. Such returns
and reports accurately reflect in all material respects all liability for taxes
of each such Credit Party and such Subsidiary for the periods covered thereby.
Except as set forth on Schedule 6.6, there is no ongoing audit or examination
or, to the knowledge of the Credit Parties, other investigation by any
Governmental Authority of the tax liability of any Credit Party or any of its
Subsidiaries, and there is no unresolved claim by any Governmental Authority
concerning the tax liability of any Credit Party or any of its Subsidiaries for
any period for which tax returns have been or were required to have been filed,
other than claims for which adequate reserves have been established in
accordance with GAAP. Neither any Credit Party nor any of its Subsidiaries has
waived or extended or has been requested to waive or extend the statute of
limitations relating to the payment of any taxes.
6.7 SUBSIDIARIES.
Set forth on Schedule 6.7, as of the Closing Date and as of each
quarterly update pursuant to Section 7.2(f), is a list of (a) all of the Credit
Parties and the Subsidiaries of the Credit Parties (including De Minimis
Subsidiaries other than De Minimis Subsidiaries holding assets with an aggregate
book value less than $1,000 and which generate no revenues), (b) a
classification of which such Subsidiaries are De Minimis Subsidiaries and (c) as
to each Subsidiary, the owners of the Capital Stock of such Subsidiary and the
percentage of the outstanding Capital Stock of such Subsidiary that such
ownership interest represents. Except for the shares of Capital Stock expressly
indicated on Schedule 6.7, there are no shares of Capital Stock, warrants,
rights, options or other equity securities of any Subsidiary of the Credit
Parties (other than De Minimis Subsidiaries) outstanding or reserved for any
purpose as of the Closing Date and as of each quarterly update pursuant to
Section 7.2(f). All outstanding shares of Capital Stock of each Subsidiary of
any Credit Party (other than De Minimis Subsidiaries) are duly and validly
issued, fully paid and nonassessable. Except as set forth on Schedule 6.7, as of
the Closing Date, neither any Credit Party nor any Subsidiary is engaged in any
joint venture, partnership or similar arrangement with any other Person.
6.8 FULL DISCLOSURE.
All factual information heretofore or contemporaneously furnished to
any Agent or any Lender in writing by or on behalf of any Credit Party or any of
its Subsidiaries for purposes of or in connection with this Credit Agreement and
the transactions contemplated hereby is, and all other such factual information
hereafter furnished to any Agent or any Lender in writing by or on behalf of any
Credit Party or any of its Subsidiaries will be, true and accurate in all
material respects on the date as of which such information is dated or certified
(or, if such information has been amended or supplemented, on the date as of
which any such amendment or supplement is dated or certified) and not made
incomplete by omitting to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which such information
was provided, not misleading.
6.9 MARGIN REGULATIONS.
Neither any Credit Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock. No proceeds of
the Loans will be used, directly or indirectly, to purchase or carry any Margin
Stock, to extend credit for such purpose or for any other purpose that would
violate or be inconsistent with Regulations T, U or X or any provision of the
Exchange Act.
6.10 NO MATERIAL ADVERSE CHANGE.
There has been no Material Adverse Change since December 31, 2001, and
there exists no event, condition or state of facts that has had or would likely
result in a Material Adverse Change.
48
6.11 FINANCIAL MATTERS.
(a) Prior Financial Statements. The Borrower has heretofore
furnished to the Administrative Agent copies of (i) the audited
consolidated balance sheets of the Credit Parties and their
Subsidiaries as of December 31, 2000 and 2001, and the related
statements of income, cash flows and stockholders' equity for the
fiscal years then ended, together with the opinion of Ernst & Young LLP
thereon, and (ii) the unaudited consolidated balance sheet of the
Credit Parties and their Subsidiaries as of September 30, 2002, and the
related statements of income, cash flows and stockholders' equity for
the nine-month period then ended. Such financial statements have been
prepared in accordance with GAAP (subject, with respect to the
unaudited financial statements, to the absence of footnotes required by
GAAP and to normal year-end adjustments) and present fairly the
financial condition of the Credit Parties and their Subsidiaries on a
consolidated basis as of the respective dates thereof and the
consolidated results of operations of the Credit Parties and their
Subsidiaries for the respective periods then ended. Except as fully
reflected in the most recent financial statements referred to above and
the footnotes thereto, there are no material liabilities or obligations
with respect to the Credit Parties and their Subsidiaries of any nature
whatsoever (whether absolute, contingent or otherwise and whether or
not due).
(b) Projections. The Borrower has prepared, and has heretofore
furnished to the Administrative Agent a copy of, annual projected
balance sheets and statements of income and cash flows of the Credit
Parties and their Subsidiaries (presented on a quarterly basis) for the
period through December 31, 2005, giving effect to the consummation of
the transactions contemplated by this Credit Agreement, the initial
extensions of credit hereunder, and the payment of transaction fees and
expenses related to the foregoing (the "Projections"). In the opinion
of management of the Borrower, the assumptions used in the preparation
of the Projections were fair and reasonable when made and continue to
be fair and reasonable as of the date hereof. The Projections have been
prepared in good faith by the executive and financial personnel of the
Borrower and represent a reasonable estimate of the future performance
and financial condition of the Credit Parties and their Subsidiaries,
subject to the uncertainties and approximations inherent in any
projections.
(c) Ongoing Financial Statements. The financial statements
provided to date pursuant to Section 7.1 have been prepared in
accordance with GAAP and present fairly the consolidated and
consolidating financial condition, results of operations and cash flows
of the Credit Parties and their subsidiaries.
(d) Solvency. Each of the Credit Parties and their
Subsidiaries (other than De Minimis Subsidiaries) is, prior to and
after giving effect to the consummation of the transactions
contemplated hereby, Solvent.
6.12 OWNERSHIP OF PROPERTIES.
Each of the Credit Parties and their Subsidiaries (other than De
Minimis Subsidiaries) (a) has good and marketable title to all real property
owned by it, (b) holds interests as lessee under valid leases in full force and
effect with respect to all material leased real and personal property used in
connection with its business, (c) possesses or has rights to use licenses,
patents, copyrights, trademarks, service marks, trade names and other assets
sufficient to enable it to continue to conduct its business substantially as
heretofore conducted and without any material conflict with the rights of
others, and (d) has good title to all of its other properties and assets
reflected in the most recent financial statements referred to in Section 6.11(a)
(except as sold or otherwise disposed of since the date thereof in compliance
with Section 8.4), in each case under clauses (a), (b), (c) and (d) above, free
and clear of all Liens other than Permitted Liens.
6.13 ERISA.
(a) Compliance. Each of the Credit Parties and its
Subsidiaries and its ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA, and each Plan is and
has been
49
administered in compliance in all material respects with all applicable
Requirements of Law, including, without limitation, the applicable
provisions of ERISA and the Code. No ERISA Event (i) has occurred
within the five-year period prior to the Closing Date, (ii) has
occurred and is continuing, or (iii) to the knowledge of the Credit
Parties, is reasonably expected to occur with respect to any Plan. No
Plan has any Unfunded Pension Liability as of the most recent annual
valuation date applicable thereto, and neither any Credit Party nor any
Subsidiary or ERISA Affiliate has engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA.
(b) Withdrawal. Neither any Credit Party nor any Subsidiary or
ERISA Affiliate has had a complete or partial withdrawal from any
Multiemployer Plan, and neither any Credit Party nor any Subsidiary or
ERISA Affiliate would become subject to any liability under ERISA if
any Credit Party or any Subsidiary or ERISA Affiliate were to withdraw
completely from all Multiemployer Plans as of the most recent valuation
date. No Multiemployer Plan is in "reorganization" or is "insolvent"
within the meaning of such terms under ERISA.
(c) Present Value. The actuarial present value of all "benefit
liabilities" (within the meaning of Section 4001 of ERISA) under each
Single Employer Plan (determined utilizing the actuarial assumptions
used to fund such Plans), whether or not vested, did not, as of the
last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the fair market value as
of such date of the assets of such Plan allocable to such accrued
liabilities.
(d) Post-Retirement Benefit Obligations. Neither any Credit
Party nor any Subsidiary or ERISA Affiliate has any material liability
with respect to "expected post-retirement benefit obligations" within
the meaning of Financial Accounting Standards Board Statement No. 106.
(e) Welfare Plans. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA
and Section 4980B of the Code apply has been administered in material
compliance with such sections.
6.14 ENVIRONMENTAL MATTERS.
(a) Hazardous Substances. No Hazardous Substances are or have
been generated, used, located, released, treated, disposed of or stored
by any Credit Party or any of its Subsidiaries or, to the knowledge of
the Credit Parties, by any other Person (including any predecessor in
interest) or otherwise, in, on or under any portion of any real
property, leased or owned, of any Credit Party or any of its
Subsidiaries, except in material compliance with all applicable
Environmental Laws, and no portion of any such real property or, to the
knowledge of the Credit Parties, any other real property at any time
leased, owned or operated by any Credit Party or any of its
Subsidiaries, has been contaminated by any Hazardous Substance; and to
the knowledge of the Credit Parties, no portion of any real property,
leased or owned, of any Credit Party or any of its Subsidiaries has
been or is presently the subject of an environmental audit, assessment
or remedial action required by any Governmental Authority.
(b) Use of Properties. No portion of any real property, leased
or owned, of any Credit Party or any of its Subsidiaries has been used
by such Credit Party or any of its Subsidiaries or, to the knowledge of
the Credit Parties, by any other Person, as or for a mine, a landfill,
a dump or other disposal facility, a gasoline service station, or
(other than for petroleum substances stored in the ordinary course of
business) a petroleum products storage facility; to the knowledge of
the Credit Parties, no portion of such real property or any other real
property at any time leased, owned or operated by any Credit Party or
any of its Subsidiaries has, pursuant to any Environmental Law, been
placed on the "National Priorities List" or "CERCLIS List" (or any
similar federal, state or local list) of sites subject to possible
environmental problems; and to the knowledge of the Credit Parties,
there are not and have never been any underground storage tanks
situated on any real property, leased or owned, of any Credit Party or
any of its Subsidiaries.
50
(c) Compliance. All activities and operations of the Credit
Parties and their Subsidiaries are in compliance with the requirements
of all applicable Environmental Laws, except to the extent the failure
so to comply, individually or in the aggregate, would not have or be
reasonably likely to have a Material Adverse Effect. Each of the Credit
Parties and their Subsidiaries has obtained all licenses and permits
under Environmental Laws necessary to its respective operations; all
such licenses and permits are being maintained in good standing; and
each of the Credit Parties and their Subsidiaries is in compliance with
all terms and conditions of such licenses and permits, except for such
licenses and permits the failure to obtain, maintain or comply with
which would not have or be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect. Neither any Credit Party
nor any of its Subsidiaries is involved in any suit, action or
proceeding, or has received any notice, complaint or other request for
information from any Governmental Authority or other Person, with
respect to any actual or alleged Environmental Claims that, if
adversely determined, would have or be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect; and, to
the knowledge of the Credit Parties, there are no threatened actions,
suits, proceedings or investigations with respect to any such
Environmental Claims, nor any basis therefor.
6.15 COMPLIANCE WITH REQUIREMENTS OF LAWS; HIPAA.
Each of the Credit Parties and their Subsidiaries and, to the knowledge
of the Credit Parties, each Affiliated Practice, (a) has timely filed all
material reports, documents and other materials required to be filed by it under
all applicable Requirements of Law with any Governmental Authority and all such
filings are true and complete in all material respects, (b) has retained all
material records and documents required to be retained by it under all
applicable Requirements of Law, and (c) is otherwise in compliance with all
applicable Requirements of Law in respect of the conduct of its business and the
ownership and operation of its properties, except for such Requirements of Law
the failure to comply with which, individually or in the aggregate, would not
have or be reasonably likely to have a Material Adverse Effect. None of the
Credit Parties and their Subsidiaries is a "covered entity" as defined in the
Privacy Standards.
6.16 REGULATED INDUSTRIES.
Neither any Credit Party nor any of its Subsidiaries is (a) an
"investment company," a company "controlled" by an "investment company," or an
"investment advisor," within the meaning of the Investment Company Act of 1940,
as amended or (b) a "holding company," a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
6.17 INSURANCE.
The assets, properties and business of the Credit Parties and their
Subsidiaries are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility (or through adequately funded self-insurance with respect to the
types of insurance coverage set forth on Schedule 6.17).
6.18 MATERIAL CONTRACTS.
Set forth on Schedule 6.18 is a list, as of the Closing Date, of each
"material contract" (within the meaning of Item 601(b)(10) of Regulation S-K
under the Exchange Act) to which any Credit Party or any of its Subsidiaries is
a party, by which any of them or their respective properties is bound or to
which any of them is subject (collectively, the "Material Contracts"), and also
indicates the parties, subject matter and term thereof. As of the Closing Date,
(a) each Material Contract is in full force and effect and is enforceable by the
Credit Party or the Subsidiary that is a party thereto in accordance with its
terms and (b) neither any Credit Party nor any of its Subsidiaries (nor, to the
knowledge of the Credit Parties, any other party thereto) is in breach of or
default under any Material Contract in any material respect or has given notice
of termination or cancellation of any Material Contract.
51
6.19 LABOR RELATIONS.
Neither any Credit Party nor any of its Subsidiaries is engaged in any
unfair labor practice within the meaning of the National Labor Relations Act of
1947, as amended. There is (a) no unfair labor practice complaint before the
National Labor Relations Board, or grievance or arbitration proceeding arising
out of or under any collective bargaining agreement, pending or, to the
knowledge of the Credit Parties, threatened, against any Credit Party or any of
its Subsidiaries, (b) no strike, lock-out, slowdown, stoppage, walkout or other
labor dispute pending or, to the knowledge of the Credit Parties, threatened
against any Credit Party or any of its Subsidiaries, and (c) to the knowledge of
the Credit Parties, no petition for certification or union election or union
organizing activities taking place with respect to any Credit Party or any of
its Subsidiaries.
6.20 SERVICE AGREEMENTS.
To the knowledge of the Credit Parties after reasonable consultation
with legal counsel, no Service Agreement to which any Credit Party or any of its
Subsidiaries is a party, nor any of the transactions contemplated thereunder,
violates any applicable Requirement of Law (a) relating to the eligibility of an
Affiliated Practice to enter into or participate in any Third Party Payor
Arrangement or otherwise applicable to such Affiliated Practice as a result of
such participation, (b) relating to any License or Reimbursement Approval of an
Affiliated Practice required in connection with any Third Party Payor
Arrangement in which it participates, (c) relating to the practice of
orthodontics and dentistry or the sharing of fees in connection therewith, or
(d) relating to the enforceability of any provision of any Service Agreement
against any Affiliated Practice by the Borrower or any Subsidiary, including,
without limitation, the obligation of any Affiliated Practice to pay all
compensation and fees to which any Credit Party or any Subsidiary is entitled
under any Service Agreement, except in each case under clauses (a), (b), (c) and
(d) above for such violations as would not, individually or in the aggregate,
have or be reasonably likely to have a Material Adverse Effect. No Service
Agreement to which any Credit Party or any of its Subsidiaries is a party, nor
any of the transactions contemplated thereunder, violates any applicable Third
Party Payor Arrangement to which any Affiliated Practice is a party, except for
such violations as would not, individually or in the aggregate, have or be
reasonably likely to have a Material Adverse Effect. With respect to the Service
Agreements, (i) each Service Agreement is in full force and effect and is
enforceable by the Credit Party or the Subsidiary that is a party thereto in
accordance with its terms and (ii) neither any Credit Party nor any of its
Subsidiaries (nor, to the knowledge of the Credit Parties, any other party
thereto) is in breach of or default under any Service Agreement in any material
respect or has given notice of termination or cancellation of any Service
Agreement, except in each case under clauses (i) and (ii) above to the extent
the failure to be in compliance with such representations would not have or be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.
6.21 REIMBURSEMENT.
The accounts receivable of the Credit Parties and their Subsidiaries
and (to the knowledge of the Credit Parties) each Affiliated Practice have been
properly adjusted in all material respects to reflect the reimbursement policies
under all applicable Requirements of Law and other Third Party Payor
Arrangements to which such Credit Party, such Subsidiary or any Affiliated
Practice is subject, and do not exceed in any material respect amounts such
Credit Party or such Subsidiary or Affiliated Practice is entitled to receive
under any capitation arrangement, fee schedule, discount formula, cost-based
reimbursement or other adjustment or limitation to usual charges. All xxxxxxxx
by each of the Credit Parties and their Subsidiaries and (to the knowledge of
the Credit Parties) each Affiliated Practice pursuant to Third Party Payor
Arrangements have been made in compliance with all applicable Requirements of
Law, except where the failure to comply would not, individually or in the
aggregate, have or be reasonably likely to have a Material Adverse Effect. There
has been no intentional or material overbilling or overcollection pursuant to
any Third Party Payor Arrangements by any Credit Party, other than as created by
routine adjustments and disallowances made in the ordinary course of business by
the payors with respect to such xxxxxxxx.
6.22 FRAUD AND ABUSE.
Neither any Credit Party nor any of its Subsidiaries has engaged (nor,
to the knowledge of the Credit Parties, has any Affiliated Practice or any
dental-shareholder, orthodontist-shareholder or employee of any Affiliated
52
Practice engaged) in any activities that are prohibited under 42 U.S.C. Section
1320a-7b, 42 U.S.C. Section 1395nn, or the regulations promulgated thereunder,
or related Requirements of Law, or under any similar state Law or regulation, or
that are prohibited by rules of professional conduct, including, without
limitation, the following: (a) knowingly and willfully making or causing to be
made a false statement or misrepresentation of a material fact in any
application for any benefit or payment; (b) knowingly and willfully making or
causing to be made any false statement or misrepresentation of a material fact
for use in determining rights to any benefit or payment; (c) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to secure such benefit or payment fraudulently; (d)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
or in kind, or offering to pay or receive such remuneration (i) in return for
referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare, Medicaid or any other government or private third party payor
or (ii) in return for purchasing, leasing, or ordering or arranging for or
recommending purchasing, leasing or ordering any good, facility, service, or
item for which payment may be made in whole or in part by Medicare, Medicaid or
any other government or private third party payor; and (e) making any prohibited
referral for designated health services, or presenting or causing to be
presented a claim or xxxx to any individual, third party payor or other entity
for designated health services furnished pursuant to a prohibited referral,
except to the extent that any activities of the types described in clauses (a)
through (e) above do not, individually or in the aggregate, (A) adversely affect
Persons generating 3% or more of total revenues of the Credit Parties and their
Subsidiaries and (B) result in exclusion of such Persons from federal or state
healthcare programs or civil or criminal penalties.
6.23 USE OF PROCEEDS.
The proceeds of the Loans and the Letters of Credit will be used solely
for the purposes specified in Section 7.11.
SECTION 7
AFFIRMATIVE COVENANTS
Each of the Credit Parties covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all Credit Party Obligations:
7.1 FINANCIAL STATEMENTS.
The Credit Parties will deliver to the Administrative Agent on behalf
of the Lenders:
(a) Quarterly Statements. On or prior to the date that is
three (3) days after the date the Borrower is required by Law to file a
quarterly report on Form 10-Q with the Securities and Exchange
Commission and in any event within forty-eight (48) days after the end
of each of the first three fiscal quarters of each fiscal year (or, if
the 48th day after the fiscal quarter end is not a Business Day, then
the next Business Day after such 48th day), unaudited consolidated and
consolidating balance sheets of the Credit Parties and their
Subsidiaries as of the end of such fiscal quarter and unaudited
consolidated and consolidating statements of income, cash flows and
stockholders' equity for the Credit Parties and their Subsidiaries for
the fiscal quarter then ended and for that portion of the fiscal year
then ended, in each case setting forth comparative consolidated (or
consolidating) figures as of the end of and for the corresponding
period in the preceding fiscal year, all in reasonable detail and
prepared in accordance with GAAP (subject to the absence of footnotes
required by GAAP and subject to normal year-end adjustments) applied on
a basis consistent with that of the preceding quarter or containing
disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles
and practices during such quarter; and
(b) Annual Statements. On or prior to the date that is three
(3) days after the date the Borrower is required by Law to file an
annual report on Form 10-K with the Securities and Exchange
53
Commission and in any event within ninety-three (93) days after the end
of each fiscal year (or, if the 93rd day after the fiscal quarter end
is not a Business Day, then the next Business Day after such 93rd day),
an audited consolidated balance sheet of the Credit Parties and their
Subsidiaries as of the end of such fiscal year and audited consolidated
statements of income, cash flows and stockholders' equity for the
Credit Parties and their Subsidiaries for the fiscal year then ended,
including the footnotes thereto, in each case setting forth comparative
figures as of the end of and for the preceding fiscal year, all in
reasonable detail and certified by the independent certified public
accounting firm regularly retained by the Borrower or another
independent certified public accounting firm of recognized national
standing reasonably acceptable to the Required Lenders, together with
(i) a report thereon by such accountants that is not qualified as to
going concern or scope of audit and to the effect that such financial
statements present fairly the consolidated financial condition and
results of operations of the Credit Parties and their Subsidiaries as
of the dates and for the periods indicated in accordance with GAAP
applied on a basis consistent with that of the preceding year or
containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting
principles and practices during such year, and (ii) a report by such
accountants to the effect that, based on and in connection with their
examination of the financial statements of the Borrower and its
Subsidiaries, they obtained no knowledge of the occurrence or existence
of any Default or Event of Default relating to accounting matters
(including, without limitation, any Event of Default resulting from the
failure of the Credit Parties to comply with the financial covenants
set forth in Section 8.14), or a statement specifying the nature and
period of existence of any such Default or Event of Default disclosed
by their audit.
7.2 OTHER BUSINESS AND FINANCIAL INFORMATION.
The Credit Parties will deliver to the Administrative Agent on behalf
of the Lenders:
(a) Compliance Certificate. Concurrently with each delivery of
the financial statements described in Section 7.1, a Compliance
Certificate with respect to the period covered by the financial
statements then being delivered, executed by a Financial Officer of the
Borrower, together with a Covenant Compliance Worksheet reflecting the
computation of and compliance with the financial covenants set forth in
Section 8.14 as of the last day of the period covered by such financial
statements and compliance with such other covenants set forth in
Section 8 as required in such Covenant Compliance Worksheet. Each such
Compliance Certificate shall contain (i) a list of each Permitted
Acquisition (the Acquisition Amount in respect of which is less than
either $2,500,000 (to the extent paid or payable in cash) or $5,000,000
(regardless of the form of consideration)) made during the most recent
fiscal quarter then ended, (ii) a schedule setting forth any
outstanding litigation between a Credit Party and an Affiliated
Practice (or former Affiliated Practice) that is pending, at Law, in
equity or in arbitration, and any judgment resulting from any such
litigation, in each case to the extent such litigation or judgment has
not been settled, dismissed, vacated, discharged or terminated, and
(iii) an updated copy of Schedule 6.7. Upon receipt of the Compliance
Certificate, the Administrative Agent shall have the right to request,
and the Borrower shall deliver within fifteen (15) days after such
request, the items described in Section 7.9(b)(i) and (ii) with respect
to any Permitted Acquisition listed in such Compliance Certificate.
(b) Updated Projections. As soon as available and in any event
within thirty (30) days prior to the beginning of each fiscal year,
updated Projections together with a certificate of a Financial Officer
of the Borrower to the effect that such updated Projections have been
prepared in good faith and are a reasonable estimate of the financial
condition and results of operations of the Credit Parties and their
Subsidiaries for the period covered thereby, subject to the
uncertainties and approximations inherent in any projections.
(c) Management Letters. Promptly upon receipt thereof and in
any event within thirty (30) days after the date the Borrower's annual
report on Form 10-K is filed with the Securities and Exchange
Commission, copies of any letter from the Borrower's independent
auditors that refers to any inadequacy, defect, problem, qualification
or other lack of satisfactory accounting controls utilized by any
Credit Party or any of its Subsidiaries (a "Management Letter") and any
report submitted or presented to the audit committee of the Board of
Directors of any Credit Party or any of its Subsidiaries by its
certified public accountants in connection with each annual audit;
promptly upon receipt thereof and in any event within thirty (30) days
after the completion of the audit, copies of any Management Letter and
any report submitted or presented to the audit
54
committee of the Board of Directors of any Credit Party or any of its
Subsidiaries by its certified public accountants in connection with any
special or interim audit; and promptly upon completion thereof and in
any event within thirty (30) days after receipt of any Management
Letter, the response reports from the applicable Credit Party or
Subsidiary in respect of the annual, special or interim audit
corresponding to such Management Letter.
(d) Information. Within five (5) days after the sending,
filing or receipt thereof, (i) any filing by the Borrower of any Form
10-Q, Form 10-K, Form 8-K or other regular, periodic and special
report, registration statement and prospectus (other than on Form S-8)
with the Securities and Exchange Commission, the National Association
of Securities Dealers, Inc. or any national securities exchange, a copy
of such filing in PDF or similar format, (ii) copies of all financial
statements, reports, notices and proxy statements that any Credit Party
and any of its Subsidiaries shall send or make available generally to
its shareholders (unless filed with the Securities and Exchange
Commission via its XXXXX system and the Borrower notifies the
Administrative Agent thereof and provides a copy thereof to the
Administrative Agent in PDF or similar format within 5 days of such
filing), (iii) all press releases and other statements made available
generally by any Credit Party or any of its Subsidiaries to the public
concerning material developments in the business of any such Credit
Party or any of its Subsidiaries, (iv) all written inquiries, requests
for information or similar correspondence from the Securities and
Exchange Commission, the
New York Stock Exchange or any similar
securities agency, national securities exchange or securities
association to any Credit Party or any of its Subsidiaries and all
responses thereto by such Credit Party or such Subsidiary, and (v) all
material notices, written inquiries, requests for information or
similar correspondence from the Internal Revenue Service related to any
audit by the Internal Revenue Service of the Borrower or any of its
Subsidiaries.
(e) Defaults, Litigation, etc. Promptly upon (and in any event
within five Business Days after) any Responsible Officer of any Credit
Party or any of its Subsidiaries obtaining knowledge thereof, written
notice of any of the following:
(i) the occurrence of any Default or Event of
Default, together with a written statement of a Responsible
Officer of such Credit Party or such Subsidiary specifying the
nature of such Default or Event of Default, the period of
existence thereof and the action that such Credit Party or
such Subsidiary has taken and proposes to take with respect
thereto;
(ii) the institution or threatened institution of any
action, suit, investigation or proceeding against or affecting
any Credit Party, any of its Subsidiaries or any Affiliated
Practice, including any such investigation or proceeding by
any Governmental Authority (other than routine periodic
inquiries, investigations or reviews), that would, if
adversely determined, have or be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect,
and any material development in any litigation or other
proceeding previously reported pursuant to Section 6.5 or this
clause (ii);
(iii) the receipt by any Credit Party or any of its
Subsidiaries from any Governmental Authority or other Person
of (A) any notice asserting any failure by the Borrower, any
of its Subsidiaries or any Affiliated Practice to be in
compliance with applicable Requirements of Law or that
threatens the taking of any action against such Person or sets
forth circumstances that, if taken or adversely determined,
would have or be reasonably likely to have a Material Adverse
Effect, (B) any notice of any actual or threatened Limitation
with respect to any License or Reimbursement Approval of any
Credit Party, any of its Subsidiaries or any Affiliated
Practice, where such action would have or be reasonably likely
to have a Material Adverse Effect or (C) any notice of, or
correspondence with respect to, the commencement of an
investigation by such Governmental Authority or other Person
(y) regarding the compliance by the Borrower, any of its
55
Subsidiaries or any Affiliated Practice with any Requirements
of Law or (z) that could reasonably be expected to result in a
Limitation with respect to any License or Reimbursement
Approval of any Credit Party, any of its Subsidiaries or any
Affiliated Practice;
(iv) the occurrence of any of the following: (A) an
ERISA Event, together with (1) a written statement of a
Responsible Officer of the Borrower specifying the details of
such ERISA Event and the action that the applicable Credit
Party or Subsidiary thereof has taken and proposes to take
with respect thereto, (2) a copy of any notice with respect to
such ERISA Event that may be required to be filed with the
PBGC and (3) a copy of any notice delivered by the PBGC to any
Credit Party, any Subsidiary thereof or any ERISA Affiliate
with respect to such ERISA Event; (B) the failure to make full
payment on or before the due date (including extensions)
thereof of all amounts which any Credit Party, any of its
Subsidiaries or any ERISA Affiliate is required to contribute
to each Plan pursuant to such Plan's terms and as required to
meet the minimum funding standard set forth in Section 302 of
ERISA and Section 412 of the Code with respect thereto; or (C)
any change in the funding status of any Plan that could have a
Material Adverse Effect; together with a description of any
such event or condition or a copy of any such notice and a
statement by the principal financial officer of the Borrower
briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been
or is being taken or is proposed to be taken by the Credit
Parties with respect thereto. Promptly upon request, a Credit
Party shall furnish the Administrative Agent and each of the
Lenders with such additional information concerning any Plan
as may be reasonably requested by the Administrative Agent,
including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department
of Labor and/or the Internal Revenue Service pursuant to ERISA
and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(v) the occurrence of any material default under, or
any proposed or threatened termination or cancellation of, any
Material Contract or other material contract or agreement to
which any Credit Party, any of its Subsidiaries or any
Affiliated Practice is a party, the termination or
cancellation of which would have or be reasonably likely to
have a Material Adverse Effect;
(vi) the occurrence of any of the following: (A) the
assertion of any Environmental Claim against or affecting any
Credit Party, any of its Subsidiaries or any of their
respective real property, leased or owned; (B) the receipt by
any Credit Party or any of its Subsidiaries of notice of any
alleged violation of or noncompliance with any Environmental
Laws; or (C) the taking of any remedial action by any Credit
Party, any of its Subsidiaries or any other Person in response
to the actual or alleged generation, storage, release,
disposal or discharge of any Hazardous Substances on, to, upon
or from any real property leased or owned by any Credit Party
or any of its Subsidiaries; but in each case under clauses
(A), (B) and (C) above, only to the extent the same would have
or be reasonably likely to have a Material Adverse Effect; and
(vii) any other matter or event that has had, or
would be reasonably likely to have, a Material Adverse Effect,
together with a written statement of a Responsible Officer of
the Borrower setting forth the nature and period of existence
thereof and the action that the applicable Credit Party or
Subsidiary thereof has taken and proposes to take with respect
thereto.
(f) HIPAA. Promptly upon the implementation by the Credit
Parties and their Subsidiaries of policies that are consistent with the
Privacy Standards, confirmation that such policies have been
implemented, such confirmation to be in a form satisfactory to the
Administrative Agent.
(g) Compliance with Other Covenants. Within thirty (30) days
after the request of the Administrative Agent, evidence of compliance
with such other covenants set forth in Section 8 as reasonably required
by the Administrative Agent.
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(h) Other Information. As promptly as reasonably possible,
such other information about the business, condition (financial or
otherwise), operations or properties of any Credit Party or any of its
Subsidiaries (including any Plan and any information required to be
filed under ERISA) as the Administrative Agent or any Lender may from
time to time reasonably request.
7.3 CORPORATE EXISTENCE; FRANCHISES; MAINTENANCE OF PROPERTIES.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to (a) maintain and preserve in full force and effect its corporate
existence, except as expressly permitted otherwise by Section 8.1, (b) obtain,
maintain and preserve in full force and effect all other rights, franchises,
licenses, permits, certifications, approvals, authorizations and other Licenses,
and all Reimbursement Approvals, required by Governmental Authorities and
necessary to the ownership, occupation or use of its properties or the conduct
of its business, except to the extent the failure to do so would not have or be
reasonably likely to have a Material Adverse Effect and (c) keep all material
properties in good working order and condition (normal wear and tear excepted)
and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced.
7.4 COMPLIANCE WITH REQUIREMENT OF LAWS/COMPLIANCE PROGRAM.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to (a) comply in all material respects with all Requirements of Law
applicable to the conduct of its business and the ownership and operation of its
properties and (b) on or before the later of (i) the date on which any
Affiliated Practice and any Credit Party executes a business associate agreement
pursuant to the Standards for Privacy of Individually Identifiable Health
Information (the "Privacy Standards") implementing the privacy requirements of
the Administrative Simplification subtitle of the Health Insurance Portability
and Accountability Act of 1996 (HIPAA) set forth at 45 CFR Parts 160 and 164 or
(ii) April 14, 2003, implement policies that are consistent with the Privacy
Standards.
7.5 PAYMENT OF OBLIGATIONS.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, (a) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not have or be reasonably likely to have a Material
Adverse Effect and (b) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
any Credit Party or any of its Subsidiaries; provided, however, that neither any
Credit Party nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which such Credit Party or such Subsidiary is
maintaining adequate reserves with respect thereto in accordance with GAAP.
7.6 INSURANCE.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies (or through adequately funded self-insurance with respect to the types
of insurance coverage set forth on Schedule 6.17) insurance with respect to its
assets, properties and business, against such hazards and liabilities, of such
types and in such amounts, as is customarily maintained by companies in the same
or similar businesses similarly situated.
7.7 MAINTENANCE OF BOOKS AND RECORDS; INSPECTION.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, (a) maintain adequate books, accounts and records, in which
full, true and correct entries shall be made of all financial transactions in
relation to its business and properties, and prepare all financial statements
required under this Credit Agreement, in each case in accordance with GAAP and
in compliance with the requirements of any Governmental Authority having
jurisdiction over it and (b) permit employees or agents of the Administrative
Agent or any Lender to inspect its properties and
57
examine or audit its books, records, working papers and accounts and make copies
and memoranda of them, and to discuss its affairs, finances and accounts with
its officers and employees and, upon notice to the Borrower, the independent
public accountants of the Credit Parties and their Subsidiaries (and by this
provision the Borrower authorizes such accountants to discuss the finances and
affairs of the Credit Parties and their Subsidiaries), all at such times and
from time to time, upon reasonable notice and during business hours, as may be
reasonably requested.
7.8 AFFILIATED PRACTICES.
Each of the Credit Parties will use its best efforts to (a) cause each
Affiliated Practice to comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties and (b) assist each Affiliated Practice to obtain,
maintain and preserve in full force and effect all other rights, franchises,
permits, certifications, approvals, authorizations, Licenses (including with
respect to orthodontist-employees and dentist-employees), and Reimbursement
Approvals, required by Governmental Authorities and necessary to the ownership,
occupation or use of its properties or the conduct of its business, except in
each case under clauses (a) and (b) above to the extent the failure to do so
would not have or be reasonably likely to have a Material Adverse Effect.
7.9 PERMITTED ACQUISITIONS.
(a) Subject to the provisions set forth below and the
requirements contained in the definition of Permitted Acquisition, and
subject to the other terms and conditions of this Credit Agreement, the
Credit Parties may from time to time on or after the Closing Date
consummate Permitted Acquisitions; provided that, with respect to any
Permitted Acquisition:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of the consummation of
a Permitted Acquisition or would exist immediately after
giving effect thereto; and
(ii) the Acquisition Amount with respect to Permitted
Acquisitions shall not exceed (A) to the extent paid or
payable in cash, (1) for any single Acquisition, $2,500,000 or
(2) in the aggregate for all Permitted Acquisitions
consummated during the same fiscal year, $25,000,000, (B) in
the aggregate for all Permitted Acquisitions consummated
during the same fiscal year (regardless of the form of
consideration), $35,000,000 and (C) to the extent related to
the purchase of assets or operations located outside of the
United States of America, in the aggregate, $1,000,000 for any
individual foreign Acquisition or $10,000,000 for all such
foreign Acquisitions from and after the Closing Date.
(b) Not less than ten Business Days prior to the consummation
of any proposed Acquisition with respect to which the Acquisition
Amount equals or exceeds either $2,500,000 (to the extent paid or
payable in cash) or $5,000,000 (regardless of the form of
consideration), the Borrower shall have delivered to the Administrative
Agent and each Lender the information and materials described in
clauses (i) through (iv) below and, if applicable, a request for a
consent to consummate such Acquisition.
(i) a reasonably detailed description of the material
terms of such Acquisition (including, without limitation, the
purchase price and method and structure of payment) and of
each Person or business that is the subject of such
Acquisition (each, a "Target");
(ii) historical financial statements of the Target
(or, if there are two or more Targets that are the subject of
such Acquisition and that are part of the same consolidated
group, consolidated and consolidating historical financial
statements for all such Targets) for the two most recent
fiscal years available and, if available, for any interim
periods since the most recent fiscal year-end;
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(iii) consolidated projected income statements of the
Credit Parties and their Subsidiaries (giving effect to such
Acquisition and the consolidation with the Credit Party of
each relevant Target) for the period from the consummation of
such Acquisition until the Maturity Date, in each case in
reasonable detail, together with any appropriate statement of
assumptions and pro forma adjustments; and
(iv) a certificate, in form and substance reasonably
satisfactory to the Administrative Agent, executed by a
Financial Officer of the Borrower setting forth the
Acquisition Amount and further to the effect that, to the best
of such Financial Officer's knowledge, (A) the consummation of
such Acquisition will not result in a violation of any
provision of this Section 7.9, and after giving effect to such
Acquisition and any Borrowings made in connection therewith,
the Credit Parties will be in compliance with the financial
covenants contained in Section 8.14, such compliance
determined with regard to calculations made on a Pro Forma
Basis in accordance with GAAP as if each Target had been
consolidated with a Credit Party for those periods applicable
to such covenants (such calculations to be attached to the
certificate), (B) the Credit Parties and their Subsidiaries
will continue to comply with the financial covenants contained
in Section 8.14 for a period of one year following the date of
the consummation of such Acquisition, and (C) after giving
effect to such Acquisition and any Borrowings in connection
therewith, the Credit Parties and their Subsidiaries will have
sufficient funds available to meet its ongoing working capital
requirements.
(c) As soon as reasonably practicable after the consummation
of any Permitted Acquisition, if requested by the Administrative Agent,
the Borrower will deliver to the Administrative Agent and each Lender a
copy of the fully executed acquisition agreement (including schedules
and exhibits thereto) and other material documents and closing papers
delivered in connection therewith.
(d) The consummation of each Permitted Acquisition shall be
deemed to be a representation and warranty by the Borrower that (except
as shall have been approved in writing by the Required Lenders) all
conditions thereto set forth in this Section and in the description
furnished under clause (i) of subsection (b) above (if applicable) have
been satisfied, that the same is permitted in accordance with the terms
of this Credit Agreement, and that the matters certified to by the
Financial Officer of the Borrower in the certificate referred to in
clause (iv) of subsection (b) above (if applicable) are, to the best of
such Financial Officer's knowledge, true and correct in all material
respects as of the date such certificate is given, which representation
and warranty shall be deemed to be a representation and warranty as of
the date thereof for all purposes hereunder, including, without
limitation, for purposes of Sections 5.2 and 9.1.
7.10 CREATION OR ACQUISITION OF SUBSIDIARIES.
Subject to the provisions of Sections 7.9 and 8.5, the Credit Parties
or their Wholly Owned Subsidiaries may from time to time create or acquire new
Wholly Owned Subsidiaries in connection with Permitted Acquisitions or
otherwise, provided that:
(a) Concurrently with (and in any event within ten Business
Days thereafter) the creation or acquisition by any Credit Party of any
new Domestic Subsidiary (other than a De Minimis Subsidiary), (i) such
Credit Party will cause such Domestic Subsidiary to execute and deliver
to the Collateral Agent a Joinder Agreement, pursuant to which such new
Domestic Subsidiary shall become a party hereto and shall guarantee the
payment in full of the Credit Party Obligations under this Credit
Agreement and the other Credit Documents, (ii) such Credit Party and/or
any applicable Subsidiary will execute and deliver to the Collateral
Agent a Pledge and Security Agreement or an amendment or supplement to
an existing Pledge and Security Agreement pursuant to which all of the
Capital Stock of such new Domestic Subsidiary shall be pledged to the
Collateral Agent, together with the certificates evidencing such
Capital Stock and undated stock powers duly executed in blank and (iii)
such Credit Party or applicable Subsidiary will execute and deliver
Intercompany Notes, as appropriate, and such Intercompany Notes shall
be delivered to the
59
Collateral Agent, together with duly executed allonges in form and
substance satisfactory to the Collateral Agent.
(b) Concurrently with (and in any event within ten Business
Days thereafter) the creation or direct or indirect acquisition by any
Credit Party of any new first-tier Foreign Subsidiary (other than a De
Minimis Subsidiary), such Credit Party will execute and deliver to the
Collateral Agent a Pledge and Security Agreement or an amendment or
supplement to an existing Pledge and Security Agreement pursuant to
which all of the Capital Stock of such new Foreign Subsidiary shall be
pledged to the Collateral Agent, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in
blank (or such other documents, instruments and other evidence as the
Collateral Agent shall require in order to perfect its security
interest (or the equivalent thereof under applicable Law of the
relevant foreign jurisdiction) in such Capital Stock); provided that no
more than 65% of the Capital Stock of any Foreign Subsidiary shall be
required to be pledged to the Collateral Agent if the pledge of more
than 65% thereof would, in the good faith judgment of the Borrower,
result in adverse tax consequences to the Borrower or would be unlawful
for such Foreign Subsidiary.
(c) As promptly as reasonably possible, the Credit Parties and
their Subsidiaries will deliver any such other documents, certificates
and opinions (including opinions of local counsel in the jurisdiction
of organization of each such new Subsidiary, including any new Foreign
Subsidiary, if applicable and requested), in form and substance
reasonably satisfactory to the Administrative Agent, as the
Administrative Agent may reasonably request in connection therewith and
will take such other action as either Agent may reasonably request to
create in favor of the Collateral Agent a perfected security interest
in the Collateral being pledged pursuant to the documents described
above. Nothing contained in this Section, however, shall be deemed to
permit the creation or acquisition by any Credit Party or any of its
Subsidiaries, directly or indirectly, of any Subsidiary not expressly
permitted under Section 8.5.
7.11 USE OF PROCEEDS.
The Borrower will use the proceeds of the Revolving Loans and the Term
Loans solely (a) to repay or refinance outstanding Indebtedness under the
Existing Credit Agreement and the Bridge Credit Agreement, (b) to pay fees and
expenses required to be paid by the terms of this Credit Agreement and the other
Credit Documents or incurred in connection herewith and (c) to provide for
working capital, Capital Expenditures and general corporate purposes of the
Credit Parties and their Subsidiaries. The Borrower will use the Letters of
Credit solely to support the obligations (including pension or insurance
obligations), contingent or otherwise, of the Credit Parties and their
Subsidiaries.
7.12 FURTHER ASSURANCES.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by either Agent or the Required
Lenders to perfect and maintain the validity, perfection and priority of the
Liens granted pursuant to the Pledge and Security Agreement and to effect,
confirm or further assure or protect and preserve the interests, rights and
remedies of the Agents and the Lenders under this Credit Agreement and the other
Credit Documents.
7.13 DE MINIMIS SUBSIDIARIES.
(a) If at any time (i) the aggregate book value of all assets
of the De Minimis Subsidiaries shall exceed $1,000,000 or (ii) the
aggregate annual revenues of the De Minimis Subsidiaries shall exceed
$500,000 (which such revenues, in the case of a newly acquired or
formed Subsidiary, shall be calculated (x) on an annualized basis as of
the end of each of the first three complete fiscal quarters following
the acquisition or formation of such Subsidiary and (y) thereafter on a
rolling four fiscal quarter basis as of the end of each fiscal
quarter), the Credit Parties will, as promptly as reasonably possible
but in any event
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within thirty (30) days thereafter (or such longer period of times
agreed to by the Administrative Agent), take any or all of the
following actions to the extent necessary to eliminate such excess: (A)
cause one or more De Minimis Subsidiaries to transfer assets to one or
more Guarantors, (B) merge one or more De Minimis Subsidiaries with and
into one or more Guarantors, or (C) cause one or more De Minimis
Subsidiaries to become Guarantors in accordance with Section 7.10.
(b) If at any time a Domestic Subsidiary that at one time met
the conditions to satisfy the definition to be a De Minimis Subsidiary
no longer meets such conditions, the Credit Parties and such Domestic
Subsidiary shall comply with the terms of Section 7.10 as if it was a
newly acquired Subsidiary.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all Credit Party Obligations:
8.1 MERGER; CONSOLIDATION.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, liquidate, wind up or dissolve, or engage in any
consolidation, merger or other combination; provided, however, that if no
Default or Event of Default exists prior to or after giving effect thereto then
the following actions may be taken:
(i) the Borrower or any other Credit Party or any Subsidiary
thereof may merge or consolidate with a Credit Party; provided that (A)
if the transaction involves the Borrower, the Borrower is the surviving
entity and (B) if the transaction involves a Credit Party other than
the Borrower, such Credit Party is the surviving entity;
(ii) any Credit Party may merge or consolidate with another
Person that is not a Credit Party; provided that (A) if the transaction
involves the Borrower, the Borrower is the surviving entity, (B) if the
transaction involves a Credit Party other than the Borrower, the
surviving entity is a Credit Party or another Person that becomes a
Credit Party under Sections 7.9 or 7.10 and (C) such merger or
consolidation constitutes a Permitted Acquisition and the applicable
conditions and requirements of Sections 7.9 and 7.10 are satisfied;
(iii) any Subsidiary that is not a Credit Party may merge or
consolidate into any other Person; provided that such merger or
consolidation shall constitute a Permitted Acquisition and the
applicable conditions and requirements of Sections 7.9 and 7.10 are
satisfied; and
(iv) any De Minimis Subsidiary may dissolve and thereafter
liquidate and wind up its affairs so long as its assets, if any, are
distributed only to a Credit Party.
8.2 INDEBTEDNESS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:
(a) Indebtedness incurred under this Credit Agreement, the
Notes and the other Credit Documents;
(b) Indebtedness existing on the Closing Date and described in
Schedule 8.2, and any extensions, renewals, replacements, modifications
and refundings thereof; provided that the principal amount thereof is
not increased from the amount shown on Schedule 8.2;
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(c) accrued expenses (including salaries, accrued vacation and
other compensation), current trade or other accounts payable and other
current liabilities arising in the ordinary course of business and not
incurred through the borrowing of money; provided that the same shall
be paid when due except to the extent being contested in good faith and
by appropriate proceedings;
(d) loans and advances by a Credit Party to another Credit
Party; provided that (i) any such loan or advance is subordinated in
right and time of payment to the Credit Party Obligations on terms and
conditions acceptable to the Administrative Agent and is evidenced by
an intercompany note (each, an "Intercompany Note"), in form and
substance satisfactory to the Collateral Agent, that is pledged to the
Collateral Agent pursuant to a Pledge and Security Agreement and (ii)
no such loan or advance shall be made to a Credit Party that is the
subject of a proceeding of the type described in Sections 9.1(e) or
9.1(f);
(e) unsecured Indebtedness, consisting of guarantees by any
Credit Party or any of its Subsidiaries of loans made to affiliated
orthodontists and orthodontic practices for the purpose of financing
costs associated with the development of new orthodontic centers;
provided that the aggregate amount outstanding under all such
guarantees shall not exceed $5,000,000 at any time outstanding (whether
incurred prior to or after the Closing Date);
(f) unsecured Indebtedness issued after the Closing Date by
any Credit Party or any of its Subsidiaries to sellers in connection
with Permitted Acquisitions (collectively, "Seller Indebtedness");
provided that (i) such Seller Indebtedness shall not exceed $15,000,000
in the aggregate at any time outstanding and (ii) no more than
$10,000,000 of the $15,000,000 of Seller Indebtedness permitted
pursuant to this subsection (f) shall fail to include a restriction on
the repayment of principal of such Seller Indebtedness during the
existence of an Event of Default;
(g) Indebtedness consisting of guarantees made in the ordinary
course of business by any Credit Party or any of its Subsidiaries of
leases or other obligations of any Credit Party or any of its
Subsidiaries, which obligations are otherwise permitted under this
Credit Agreement;
(h) Indebtedness of the Borrower under Hedging Agreements
entered into in the ordinary course of business and not for speculative
purposes; provided that the notional amount covered under all such
agreements shall not exceed the sum of the Revolving Committed Amount
plus the outstanding principal amount of Term Loans;
(i) purchase money Indebtedness of the Credit Parties and
their Subsidiaries incurred solely to finance the payment of all or
part of the purchase price of any equipment, real property or other
fixed assets acquired in the ordinary course of business, including
Indebtedness in respect of capital lease obligations, and any renewals,
refinancings or replacements thereof; provided that the aggregate
amount of such Indebtedness plus the aggregate amount of Indebtedness
incurred pursuant to subsection (n) below shall not exceed $5,000,000
at any time outstanding;
(j) Indebtedness consisting of promissory notes made by a
Credit Party to Affiliated Practices under incentive programs (the
"Incentive Program Indebtedness") in an aggregate amount not to exceed
$15,000,000 at any time outstanding;
(k) unsecured Indebtedness of the Credit Parties and their
Subsidiaries incurred in connection with any transaction or series of
transactions providing for the financing of assets through one or more
securitizations or in connection with, or pursuant to, any synthetic
lease or similar off-balance sheet financing in an aggregate amount not
to exceed $5,000,000 at any one time;
(l) an overdraft line of credit with a financial institution
that handles the Borrower's cash management in an amount not to exceed
$3,000,000;
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(m) Indebtedness of OCA Japan Co., Ltd. or any Subsidiary
thereof in an aggregate amount not to exceed $5,000,000 at any time
outstanding; and
(n) other unsecured Indebtedness of the Credit Parties and
their Subsidiaries, including Contingent Obligations (other than
Indebtedness specified in subsections (a) through (m) above); provided
that the aggregate amount of such Indebtedness plus the aggregate
amount of Indebtedness incurred pursuant to subjection (i) above shall
not exceed $5,000,000 at any time outstanding.
8.3 LIENS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or file or permit the filing
of, or permit to remain in effect, any financing statement or other similar
notice of any Lien with respect to any such property, asset, income or profits
under the Uniform Commercial Code of any state or under any similar recording or
notice statute, or agree to do any of the foregoing, other than the following
(collectively, "Permitted Liens"):
(a) Liens in favor of the Collateral Agent, for the benefit of
the Lenders;
(b) Liens in existence on the Closing Date and set forth on
Schedule 8.3;
(c) Liens imposed by Law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar
Liens incurred in the ordinary course of business for sums not
constituting borrowed money that are not overdue for a period of more
than thirty (30) days or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(d) Liens (other than any Lien imposed by ERISA, the creation
or incurrence of which would result in an Event of Default under
Section 9.1(i)) incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure the
performance of letters of credit, bids, tenders, statutory obligations,
surety and appeal bonds, leases, government contracts and other similar
obligations (other than obligations for borrowed money) entered into in
the ordinary course of business;
(e) Liens for taxes, assessments or other governmental charges
or statutory obligations that are not delinquent or remain payable
without any penalty or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(f) Liens securing purchase money and capital lease
Indebtedness permitted under Section 8.2(i), provided that any such
Lien (i) shall attach to such property concurrently with or within ten
days after the acquisition thereof by any Credit Party or any of its
Subsidiaries, (ii) shall not exceed the lesser of (A) the fair market
value of such property or (B) the cost thereof to such Credit Party or
such Subsidiary and (iii) shall not encumber any other property of any
Credit Party or any of its Subsidiaries;
(g) any attachment or judgment Lien not constituting an Event
of Default under Section 9.1(g) that is being contested in good faith
by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(h) Liens arising from the filing, for notice purposes only,
of financing statements in respect of true leases;
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(i) with respect to any real property occupied by any Credit
Party or any of its Subsidiaries, all easements, rights of way,
licenses and similar encumbrances on title that do not materially
impair the use of such property for its intended purposes; and
(j) other Liens securing Indebtedness permitted pursuant to
Section 8.2 in an aggregate amount not exceeding $1,000,000 at any time
outstanding.
8.4 DISPOSITION OF ASSETS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) all or any portion of
its assets, business or properties (including, without limitation, any Capital
Stock of any Subsidiary), or enter into any arrangement with any Person
providing for the lease by a Credit Party or any Subsidiary as lessee of any
asset that has been sold or transferred by such Credit Party or such Subsidiary
to such Person, or agree to do any of the foregoing, except for:
(a) sales of inventory in the ordinary course of business;
(b) the sale or exchange of used or obsolete equipment to the
extent (i) the proceeds of such sale (A) are applied towards, or such
equipment is exchanged for, replacement equipment or (B) do not exceed
$25,000 in the aggregate for any fiscal quarter or (ii) such equipment
is no longer necessary for the operations of a Credit Party or its
applicable Subsidiary in the ordinary course of business;
(c) the sale, lease or other disposition of assets by any
Subsidiary to any Credit Party if, immediately after giving effect
thereto, no Default or Event of Default would exist;
(d) sales of receivables by OCA Japan Co., Ltd. on a
non-recourse basis in an aggregate amount not to exceed $5,000,000;
(e) subject to Section 3.3(b)(v), Service Agreement Buy-Outs
of Litigating ORAL Affiliated Practices;
(f) Service Agreement Buy-Outs of Affiliated Practices (other
than Litigating ORAL Affiliated Practices) resulting in proceeds or
settlement amounts (whether paid in cash or otherwise and whether or
not accrued or deferred) in an aggregate amount not to exceed
$25,000,000; provided, that any proceeds in excess of $20,000,000 must
be forwarded to the Administrative Agent in accordance with Section
3.3(b)(ii) and applied in accordance with Section 3.3(c) and may not be
reinvested in accordance with the terms of Section 3.3(b)(ii) and
Section 8.4(g); and
(g) other sales or dispositions of assets for fair value and
for cash; provided that (i) the Net Cash Proceeds from such sales or
dispositions do not exceed $5,000,000 in the aggregate for the Credit
Parties and their Subsidiaries during any fiscal year, (ii) such Net
Cash Proceeds are either (A) immediately delivered to the
Administrative Agent for application in prepayment of the Term Loans,
Revolving Loans and Cash Collateralization of the L/C Obligations in
accordance with the provisions of Sections 3.3(b) and (c) or (B)
expended to acquire assets or properties or otherwise reinvested in the
businesses of the Credit Parties and their Subsidiaries (other than
through the purchase, redemption, retirement or acquisition of common
Capital Stock of the Borrower) in accordance with the terms of this
Section 8.4(g), (iii) if such Net Cash Proceeds are to be reinvested in
accordance with the foregoing clause (ii), (A) the Borrower shall
deliver to the Administrative Agent promptly upon receipt of such Net
Cash Proceeds a certificate from a Responsible Officer stating that a
Credit Party intends to use such Net Cash Proceeds to acquire assets or
properties or otherwise reinvest such Net Cash Proceeds in the
businesses of the Credit Parties and their Subsidiaries within 180 days
of the receipt of such Net Cash Proceeds, (B) the Borrower shall
deliver to the Administrative Agent within 120 days after receipt of
such Net Cash Proceeds a certificate from a Responsible Officer
specifying the assets or properties to be acquired with such Net Cash
Proceeds or how
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such Net Cash Proceeds will be reinvested in the businesses of the
Credit Parties and their Subsidiaries and (C) such Net Cash Proceeds
shall be reinvested within 180 days of the receipt thereof; it being
expressly agreed that any Net Cash Proceeds not so reinvested shall be
delivered to the Administrative Agent for application in prepayment of
the Term Loans, Revolving Loans and Cash Collateralization of the L/C
Obligations in accordance with the provisions of Sections 3.3(b) and
(c) immediately thereafter, (iv) such sale or disposition does not
consist of any of the Capital Stock of any Subsidiary and (v)
immediately after giving effect thereto, no Default or Event of Default
would exist.
8.5 INVESTMENTS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, (a) purchase, own, invest in or
otherwise acquire any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, (b) make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or (c)
purchase or otherwise acquire (whether in one or a series of related
transactions) any portion of the assets, business or properties of another
Person (including pursuant to an Acquisition), or create or acquire any
Subsidiary, or become a partner or joint venturer in any partnership or joint
venture (collectively, "Investments"), or make a commitment or otherwise agree
to do any of the foregoing, other than:
(a) Investments in Cash Equivalents;
(b) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment in the ordinary course of
business,
(c) Investments consisting of loans and advances to employees
for reasonable travel, relocation and business expenses in the ordinary
course of business, extensions of trade credit in the ordinary course
of business, and prepaid expenses incurred in the ordinary course of
business;
(d) Investments consisting of (i) intercompany Indebtedness
permitted under Section 8.2(d) and (ii) Hedging Agreements permitted
under Section 8.2(h);
(e) Investments in Subsidiaries as set forth on Schedule 6.7
and Investments in joint ventures existing as of the Closing Date as
set forth on Schedule 8.5;
(f) Investments (i) by a Credit Party or any Subsidiary in any
other Wholly Owned Subsidiary that is (or immediately after giving
effect to such Investment will be) a Domestic Subsidiary and a
Guarantor; provided that such Credit Party complies with the provisions
of Section 7.10 as applicable and (ii) by any Subsidiary in the
Borrower;
(g) Permitted Acquisitions;
(h) Investments consisting of temporary or overnight
investments and other investment products sold to any Credit Party or
any of its Subsidiaries by any Lender or any Affiliate thereof in order
to facilitate such Person's cash management;
(i) Investments in Foreign Subsidiaries made after the Closing
Date that do not constitute a Permitted Acquisition (including, without
limitation (but without duplication), capital contributions made to any
Foreign Subsidiary, loans and advances made to any Foreign Subsidiary,
and Contingent Obligations with respect to obligations of any Foreign
Subsidiary), in an aggregate amount not exceeding the Dollar Equivalent
of $5,000,000 at any time outstanding for all such Investments;
(j) Investments in Affiliated Practices existing as of the
Closing Date as set forth on Schedule 8.5 and Investments made in
Affiliated Practices after the Closing Date, in an aggregate amount not
exceeding $35,000,000 at any time outstanding for all such Investments;
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(k) Reimbursable Investments; and
(l) other Investments in an aggregate amount not exceeding
$2,500,000 at any time outstanding.
8.6 RESTRICTED PAYMENTS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, declare or make any dividend
payment, or make any other distribution of cash, property or assets, in respect
of any of its Capital Stock or any warrants, rights or options to acquire its
Capital Stock, or purchase, redeem, retire or otherwise acquire for value any
shares of its Capital Stock or any warrants, rights or options to acquire its
Capital Stock, or set aside funds for any of the foregoing, except that if no
Default or Event of Default shall exist or be caused by giving effect thereto:
(a) the Borrower may declare and make dividend payments or
other distributions payable solely in its common Capital Stock;
(b) each Wholly Owned Subsidiary may declare and make dividend
payments or other distributions to a Credit Party, or (if such
declaring Subsidiary is a Foreign Subsidiary) to another Foreign
Subsidiary, in each case to the extent not prohibited under applicable
Requirements of Law; and
(c) as long as no Default or Event of Default exists or would
be caused thereby and subject to the requirements set forth below, the
Borrower may purchase, redeem, retire or otherwise acquire for value
shares of its common Capital Stock (i) in an amount up to $5,000,000,
in the aggregate, if prior to and after giving effect thereto, the
Unused Revolving Commitment is greater than or equal to $20,000,000,
and (ii) after the basket limitation in the foregoing clause (i) has
been exhausted, in an amount up to $10,000,000, in the aggregate, for
each twelve month period thereafter if prior to and after giving effect
thereto (A) the Unused Revolving Commitment is greater than or equal to
$25,000,000 and (B) the Leverage Ratio is less than or equal to 2.0 to
1.0; provided that (1) with respect to one or more purchases,
redemptions, retirements or acquisitions by the Borrower of its common
Capital Stock during or over a period of time (up to one month), the
Borrower shall notify the Administrative Agent at least three Business
Days prior to the commencement thereof and the maximum dollar amount
that may be expended in purchasing, redeeming, retiring or acquiring
such common Capital Stock during such period and (2) within three
Business Days after the end of each calendar month in which the
Borrower has purchased, redeemed, retired or otherwise acquired for
value shares of its common Capital Stock pursuant to this Section
8.6(c), the Borrower shall deliver to the Administrative Agent a
written certificate of a Responsible Officer in the form of Schedule
8.6 (x) setting forth the number of shares purchased, redeemed, retired
or acquired during the most recent month ended and the average price
paid for such shares, (y) certifying that each such purchase,
redemption, retirement or acquisition of shares complied with the terms
of clauses (i) or (ii) above and (z) demonstrating compliance with the
financial covenants in Section 8.14 on a Pro Forma Basis.
8.7 TRANSACTIONS WITH AFFILIATES.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, enter into any transaction (including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service) with any officer, director, stockholder or other Affiliate of
any Credit Party or any Subsidiary, except in the ordinary course of its
business and upon fair and reasonable terms that are no less favorable to it
than would obtain in a comparable arm's length transaction with a Person other
than an Affiliate of such Credit Party or such Subsidiary; provided, however,
that nothing contained in this Section shall prohibit (a) transactions described
on Schedule 8.7 or otherwise expressly permitted under this Credit Agreement; or
(b) the payment by the Borrower of reasonable and customary fees to members of
its board of directors.
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8.8 LINES OF BUSINESS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, engage in any business other than the provision of
practice management and consulting services to dental and orthodontic practices
and businesses and activities reasonably related thereto.
8.9 CERTAIN AMENDMENTS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, amend, modify or change any provision of its
Organizational Documents, or the terms of any class or series of its Capital
Stock, if such amendment, modification or change could reasonably be expected to
adversely affect the Lenders.
8.10 LIMITATION ON CERTAIN RESTRICTIONS.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction or encumbrance on (a) the
ability of such Credit Party and its Subsidiaries to perform and comply with
their respective obligations under the Credit Documents or (b) the ability of
any Subsidiary of any Credit Party to make any dividend payments or other
distributions in respect of its Capital Stock, to repay Indebtedness owed to
such Credit Party or any other Subsidiary, to make loans or advances to such
Credit Party or any other Subsidiary, or to transfer any of its assets or
properties to such Credit Party or any other Subsidiary, in each case other than
such restrictions or encumbrances existing under or by reason of the Credit
Documents or applicable Requirements of Law.
8.11 NO OTHER NEGATIVE PLEDGES.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, enter into or suffer to exist
any agreement or restriction that prohibits or conditions the creation,
incurrence or assumption of any Lien upon or with respect to any part of its
property or assets, whether now owned or hereafter acquired, or agree to do any
of the foregoing, other than as set forth in (a) this Credit Agreement and the
Collateral Documents, (b) any agreement or instrument creating a Permitted Lien
(but only to the extent such agreement or restriction applies only to the assets
subject to such Permitted Lien) and (c) operating leases of real or personal
property entered into by any Credit Party or any of its Subsidiaries as lessee
in the ordinary course of business.
8.12 FISCAL YEAR.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31.
8.13 ACCOUNTING CHANGES.
Each of the Credit Parties will not, and will not permit or cause any
of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be required or permitted by GAAP.
8.14 FINANCIAL COVENANTS.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain the following financial covenants:
(a) Leverage Ratio. The Leverage Ratio as of any date shall be
less than 3.0 to 1.0.
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio (i) as of the last day of each fiscal quarter of the Borrower
from the Closing Date through June 30, 2003, shall be greater than 1.35
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to 1.0, (ii) as of the last day of each fiscal quarter of the Borrower
from September 30, 2003 through December 31, 2003, shall be greater
than 1.40 to 1.0; (iii) as of the last day of each fiscal quarter of
the Borrower from March 31, 2004 through December 31, 2004, shall be
the greater than 1.45 to 1.0 and (iv) as of the last day of each fiscal
quarter of the Borrower from March 31, 2005 and thereafter, shall be
greater than 1.5 to 1.0.
(c) Consolidated Net Worth. Consolidated Net Worth, as of the
last day of each fiscal quarter of the Borrower, shall be greater than
the sum of (a) $384,000,000 plus (b) 80% of the aggregate of
Consolidated Net Income for each fiscal quarter ending after September
30, 2002 without taking into account any losses for any such fiscal
quarter plus (c) 90% of the aggregate amount of all increases in the
stated capital and additional paid-in capital accounts of the Credit
Parties and their Subsidiaries, as determined in accordance with GAAP,
resulting from the issuance of equity securities (including pursuant to
the exercise of options, rights or warrants or pursuant to the
conversion of convertible securities) or other Capital Stock after
September 30, 2002.
(d) Funded Debt to Total Patient Contract Balances.
Consolidated Funded Debt, as of the last day of each fiscal quarter of
the Borrower, shall be less than 30% of Total Patient Contract Balances
as of such date.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENT OF DEFAULT.
An event of default shall exist upon the occurrence, and during the
continuation, of any of the following specified events (each an "Event of
Default"):
(a) Payment. The Borrower shall fail to pay (i) any principal
of any Loan when due or (ii) any interest on any Loan (including
interest payable to the Alternative Rate Lender), any fee or any other
Credit Party Obligation when due, and in the case of clause (ii) only,
such failure shall continue unremedied for a period of two or more
Business Days. Any Guarantor shall fail to pay when due any of its
obligations under the Guaranty.
(b) Covenants.
(i) Any Credit Party shall fail to observe, perform
or comply with any condition, covenant or agreement contained
in Sections 7.2(e)(i), 7.3(a), 7.9, 7.10, 7.11 or Sections 8.1
through 8.14, inclusive.
(ii) Any Credit Party or any of its Subsidiaries
shall fail to observe, perform or comply with any condition,
covenant or agreement contained in this Credit Agreement or
any of the other Credit Documents other than those enumerated
in subsections (a) and (b)(i) above, and such failure shall
continue unremedied for any grace period specifically
applicable thereto or, if no such grace period is applicable,
for a period of (A) five days in the case of the covenants set
forth in Sections 7.1 and 7.2 (other than 7.2(e)(i)) and (B)
thirty days in all other instances, in each case under clauses
(A) and (B) above after the earlier of (x) the date on which a
Responsible Officer of the Credit Party or such Subsidiary
acquires or should have acquired knowledge thereof and (y) the
date on which written notice thereof is delivered by the
Administrative Agent or any Lender to the Borrower.
(c) Representations. Any representation or warranty made or
deemed made by or on behalf of any Credit Party or any of its
Subsidiaries in this Credit Agreement, any of the other Credit
Documents or in any certificate, instrument, report or other document
furnished in connection herewith or therewith or in
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connection with the transactions contemplated hereby or thereby shall
prove to have been false or misleading in any material respect as of
the time made, deemed made or furnished.
(d) Defaults Under Other Indebtedness. Any Credit Party or any
of its Subsidiaries shall (i) fail to pay when due (whether by
scheduled maturity, acceleration or otherwise and after giving effect
to any applicable grace period) (A) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this
Credit Agreement) having an aggregate principal amount of at least
$2,500,000 or (B) any termination or other payment under any Hedging
Agreement covering a notional amount of Indebtedness of at least
$2,500,000 or (ii) fail to observe, perform or comply with any
condition, covenant or agreement contained in any agreement or
instrument evidencing or relating to any such Indebtedness, or any
other event shall occur or condition exist in respect thereof, and the
effect of such failure, event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or a trustee or agent on its or
their behalf) to cause (with the giving of notice, lapse of time, or
both), such Indebtedness to become due, or to be prepaid, redeemed,
purchased or defeased, prior to its stated maturity.
(e) Voluntary Bankruptcy. Any Credit Party or any of its
Subsidiaries (other than a De Minimis Subsidiary) shall (i) file a
voluntary petition or commence a voluntary case seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of
debts or any other relief under the Bankruptcy Code or under any other
Debtor Relief Law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate
manner, any petition or case of the type described in subsection (f)
below, (iii) apply for or consent to the appointment of or taking
possession by a custodian, trustee, receiver or similar official for or
of itself or all or a substantial part of its Properties or assets,
(iv) fail generally, or admit in writing its inability, to pay its
debts as they become due, (v) make a general assignment for the benefit
of creditors or (vi) take any corporate action to authorize or approve
any of the foregoing.
(f) Involuntary Bankruptcy. Any involuntary petition or case
shall be filed or commenced against any Credit Party or any of its
Subsidiaries (other than a De Minimis Subsidiary) seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of
debts, the appointment of a custodian, trustee, receiver or similar
official for it or all or a substantial part of its Properties or any
other relief under the Bankruptcy Code or under any other Debtor Relief
Law hereafter in effect, and such petition or case shall continue
undismissed and unstayed for a period of sixty days or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered in any such proceeding.
(g) Judgments. Any one or more money judgments, writs or
warrants of attachment, executions or similar processes involving an
aggregate amount (exclusive of amounts fully bonded or covered by
insurance as to which the surety or insurer, as the case may be, has
acknowledged its liability in writing and that carry a deductible not
exceeding $10,000 in the aggregate) in excess of $2,500,000 shall be
entered or filed against any Credit Party or any of its Subsidiaries or
any of their respective Properties and the same shall not be dismissed,
stayed or discharged for a period of thirty days or in any event later
than five days prior to the date of any proposed sale thereunder.
(h) Credit Documents. (i) Any Credit Document shall fail to be
in full force and effect or any Credit Party shall so assert, (ii) any
Collateral Document shall for any reason fail to give the Collateral
Agent a valid and perfected security interest in and Lien upon the
Collateral purported to be covered thereby, subject to no Liens other
than Permitted Liens (or any Credit Party shall so assert), in each
case unless any such failure is due to any act or failure to act on the
part of the Collateral Agent or any Lender, or (iii) any Guarantor or
any Person acting on behalf of any such Guarantor shall deny or
disaffirm its obligations under the Guaranty.
(i) ERISA. Any ERISA Event or any other event or condition
shall occur or exist with respect to any Plan and, as a result thereof,
together with all other ERISA Events and other events or conditions
then existing, the Credit Parties, their Subsidiaries and the ERISA
Affiliates have incurred or
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would be reasonably likely to incur liability to any one or more Plans
or to the PBGC (or to any combination thereof) in excess of $2,500,000.
(j) Limitation on Licenses or Reimbursement Approvals. There
shall occur (i) a Limitation with respect to any one or more Licenses
or Reimbursement Approvals of any Credit Party, any of its Subsidiaries
or any Affiliated Practice, or any other action shall be taken by any
Governmental Authority or other Person in response to any alleged
failure by such Credit Party, such Subsidiary or such Affiliated
Practice to be in compliance with applicable Requirements of Law, and
such Limitation or other action, individually or in the aggregate, has
had or would be reasonably likely to have a Material Adverse Effect or
(ii) any introduction of or change in any Requirement of Law (or in the
interpretation or administration thereof by any Governmental Authority)
governing or affecting any Credit Party, any of its Subsidiaries or any
Affiliated Practice, and such introduction or change, individually or
in the aggregate, has had or would be reasonably likely to have a
Material Adverse Effect.
(k) Termination of Contracts. Any one or more agreements or
contracts to which any Credit Party or any of its Subsidiaries is a
party shall be terminated or shall, for any other reason, fail to be in
full force and effect and enforceable in accordance with its terms, and
such event or condition, together with all other such events or
conditions, if any, has had or would be reasonably likely to have a
Material Adverse Effect.
(l) Casualty Loss. There shall occur (i) any uninsured damage
to, or loss, theft or destruction of, any Collateral or other
Properties of the Credit Parties and their Subsidiaries having an
aggregate fair market value in excess of $2,500,000 or (ii) any labor
dispute, act of God or other casualty that has had or would be
reasonably likely to have a Material Adverse Effect.
(m) Change of Control. Any of the following shall occur: (i)
any Person or group of Persons acting in concert as a partnership or
other group shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise, have
become, after the date hereof, the "beneficial owner" (within the
meaning of such term under Rule 13d-3 under the Exchange Act) of
Capital Stock of the Borrower representing 30% or more of the combined
voting power of the then outstanding Capital Stock of the Borrower
ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors or (ii) the Board
of Directors of the Borrower shall cease to consist of a majority of
the individuals (A) who constituted the Board of Directors as of the
Closing Date or (B) who shall have become a member thereof subsequent
to the Closing Date after having been nominated, or otherwise approved
in writing, by at least a majority of individuals who constituted the
Board of Directors of the Borrower as of the Closing Date (or their
replacements approved as herein required).
9.2 ACCELERATION; REMEDIES.
Upon the occurrence and during the continuation of an Event of Default,
the Administrative Agent may or, upon the request and direction of the Required
Lenders, shall take the following actions without prejudice to the rights of any
Agent or any Lender to enforce its claims against the Credit Parties, except as
otherwise specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments and
the obligation of the L/C Issuer to make L/C Credit Extensions
terminated whereupon the Commitments and the obligation of the L/C
Issuer to make L/C Credit Extensions shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and
any accrued interest in respect of all Loans, all L/C Obligations and
any and all other Credit Party Obligations of any and every kind owing
by a Credit Party to any of the Agents or Lenders under the Credit
Documents to be due, whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties.
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(c) Cash Collateral. Direct the Borrower to Cash Collateralize
(and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(e) or (f), it will
immediately Cash Collateralize) L/C Obligations in respect of
subsequent drawings under all then outstanding Letters of Credit in an
amount equal to the then outstanding principal amount of L/C
Obligations.
(d) Enforcement of Rights. To the extent permitted by Law,
enforce (and direct the Collateral Agent to enforce) any and all rights
and interests created and existing under applicable Law and under the
Credit Documents, including, without limitation, all rights and
remedies existing under the Collateral Documents, all rights and
remedies against a Guarantor and all rights of set-off.
(e) Alternative Rate Agreements. At any time following the
occurrence of an Event of Default, the Alternative Rate Lender may, in
its sole discretion, by notice to the Borrower and the Administrative
Agent, terminate the Alternative Rate Agreement and cause the
Alternative Rate applicable to any Loan or any portion thereof to
revert to the Original Rate or, if applicable, the Default Rate for
such Loan; it being understood that (i) interest on any unpaid
Alternative Rate Loan after the last Interest Payment Date to occur
prior to the Event of Default shall accrue at the Original Rate and
(ii) the Borrower shall be liable to the Alternative Rate Lender for
any Alternative Rate Breakage Amount.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) or (f) shall occur, then the Commitments and any obligation of the L/C
Issuer to make L/C Credit Extensions shall automatically terminate and all
Loans, all L/C Obligations, all accrued interest in respect thereof, all accrued
and unpaid fees and other Credit Party Obligations owing to the Agents and the
Lenders hereunder shall immediately become due and payable without the giving of
any notice or other action by the Administrative Agent or the Lenders, which
notice or other action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by Law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuation of an Event of Default, all amounts
collected or received by any Agent or any Lender on account of amounts
outstanding under any of the Credit Documents shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including the reasonable fees and expenses of legal
counsel) of the Agents, the L/C Issuer, the Alternative Rate Lender or
any of the Lenders in connection with enforcing the rights of the
Agents, the Alternative Rate Lender, the L/C Issuer and the Lenders
under the Credit Documents, ratably among them in proportion to the
amounts described in this clause "FIRST" payable to them;
SECOND, to payment of any fees owed to the Agents, the
Alternative Rate Lender, the L/C Issuer or any Lender, ratably among
them in proportion to the amounts described in this clause "SECOND"
payable to them;
THIRD, to the payment of all accrued interest payable to the
Lenders, the Alternative Rate Lender and the L/C Issuer hereunder,
ratably among them in proportion to the amounts described in this
clause "THIRD" payable to them;
FOURTH, to the payment of the outstanding principal amount of
the Loans and L/C Obligations and to any principal amounts outstanding
under Hedging Agreements between a Credit Party and a Lender or an
Affiliate of a Lender, ratably among them in proportion to the amounts
described in this clause "FOURTH" payable to them;
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FIFTH, to the Administrative Agent, for the account of the L/C
Issuer, to Cash Collateralize that portion of the L/C Obligations
comprised of the aggregate undrawn amount of Letters of Credit;
SIXTH, to all other Credit Party Obligations which shall have
become due and payable under the Credit Documents and not repaid
pursuant to clauses "FIRST" through "FIFTH" above, ratably among the
holders of such Credit Party Obligations in proportion to the amounts
described in this clause "SIXTH" payable to them; and
SEVENTH, the payment of the surplus, if any, to whomever may
be lawfully entitled to receive such surplus.
Amounts used to Cash Collateralize the aggregate undrawn amount of Letters of
Credit pursuant to clause "FIFTH" above shall be applied to satisfy drawings
under such Letters of Credit as they occur. If any amount remains on deposit as
cash collateral after all Letters of Credit have either been fully drawn or
expired, such remaining amount shall be applied to the other Credit Party
Obligations, if any, in the order set forth above.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT AND AUTHORIZATION OF AGENTS.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes each of the Agents to take such action on its behalf under
the provisions of this Credit Agreement and each other Credit Document
and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Credit Agreement or any other
Credit Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained
elsewhere herein or in any other Credit Document, the Agents shall not
have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agents have or be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall
be read into this Credit Agreement or any other Credit Document or
otherwise exist against the Agents. Without limiting the generality of
the foregoing sentence, the use of the term "agent" herein and in the
other Credit Documents with reference to either Agent is not intended
to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Requirement of Law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship
between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits
and immunities (i) provided to the Agents in this Section 10 with
respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued
by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agents"
as used in this Section 10 and in the definition of "Agent-Related
Person" included the L/C Issuer with respect to such acts or omissions,
and (ii) as additionally provided herein with respect to the L/C
Issuer.
10.2 DELEGATION OF DUTIES.
Each of the Agents may execute any of its duties under this Credit
Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. No
Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
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10.3 LIABILITY OF AGENTS.
No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by an Agent under or in
connection with, this Credit Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof.
10.4 RELIANCE BY AGENTS.
(a) Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic
mail message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to any Credit Party), independent
accountants and other experts selected by such Agent. Each Agent shall
be fully justified in failing or refusing to take any action under any
Credit Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. Each
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Credit Agreement or any other Credit Document
in accordance with a request or consent of the Required Lenders (or
such greater number of Lenders as may be expressly required hereby in
any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Administrative Agent shall have received notice from
such Lender prior to the proposed Closing Date specifying its objection
thereto.
10.5 NOTICE OF DEFAULT.
No Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless such Agent shall
have received written notice from a Lender or the Borrower referring to this
Credit Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." Each Agent will notify the Lenders of its
receipt of any such notice. Each of the Agents shall take such action with
respect to such Default or Event of Default as may be directed by the Required
Lenders in accordance with Section 9; provided, however, that unless and until
such Agent has received any such direction, such Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
10.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY AGENTS.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by an Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
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affairs of any Credit Party or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the Agents
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Credit
Parties and their respective Subsidiaries, and all applicable bank or other
regulatory Requirement of Laws relating to the transactions contemplated hereby,
and made its own decision to enter into this Credit Agreement and to extend
credit to the Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Credit Agreement and the other Credit Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent herein, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Credit Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
10.7 INDEMNIFICATION OF AGENTS.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), on a pro rata basis, and hold harmless
each Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided further, however,
that no action taken in accordance with the directions of the Required Lenders
shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including, without limitation, the reasonable
fees and expenses of legal counsel) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Credit Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive termination of the
Commitments, the payment of all Credit Party Obligations and the resignation of
the Administrative Agent.
10.8 AGENTS IN THEIR INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent, the
Collateral Agent, the Alternative Rate Lender or the L/C Issuer hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Credit Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Credit Party
or such Affiliate) and acknowledge that the Agents shall be under no obligation
to provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Credit Agreement as any other
Lender and may exercise such rights and powers as though it were not the
Administrative Agent, the Collateral Agent, the Alternative Rate Lender or the
L/C Issuer, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
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10.9 SUCCESSOR AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders; provided that any such resignation by Bank of
America shall also constitute its resignation as Collateral Agent and as L/C
Issuer and may, at the option of Bank of America, constitute its resignation as
Alternative Rate Lender. If the Administrative Agent resigns under this Credit
Agreement, the Required Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders, which successor Administrative Agent shall
be consented to by the Borrower at all times other than during the existence of
an Event of Default (which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor Administrative Agent is appointed prior to
the effective date of the resignation of the retiring Administrative Agent, the
retiring Administrative Agent may appoint, after consulting with the Lenders and
the Borrower, a successor Administrative Agent from among the Lenders. Upon the
acceptance of its appointment as successor Administrative Agent hereunder, the
Person acting as such successor Administrative Agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent, the retiring
Collateral Agent, the retiring L/C Issuer and, if applicable, the retiring
Alternative Rate Lender, and the respective terms "Administrative Agent", "L/C
Issuer" and, if applicable, "Alternative Rate Lender", shall mean such successor
Administrative Agent, L/C Issuer, and, if applicable, Alternative Rate Lender
and the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated and the retiring Collateral Agent's,
the retiring L/C Issuer's and, if applicable, the retiring Alternative Rate
Lender's rights, powers and duties as such shall be terminated, without any
other or further act or deed on the part of the retiring Collateral Agent, the
retiring L/C Issuer and, if applicable, the retiring Alternative Rate Lender, or
any other Lender, other than (a) the obligation of the retiring Collateral Agent
to deliver any Collateral in its possession to the successor Collateral Agent,
(b) the obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit and (c) the obligation of the successor Alternative Rate
Lender to enter into Alternative Rate Agreements with the Borrower in
substitution for the Alternative Rate Agreements, if any, existing at the time
of such succession. After any retiring Agent's resignation hereunder as an
Agent, the provisions of this Section 10 and Section 11.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Credit Agreement. If no successor Administrative Agent has
accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for above.
10.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Credit Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Credit Party Obligations that are owing and
unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Agents
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Agents and their
respective agents and counsel and all other amounts due the Lenders and
the Agents under Sections 3.4 and 11.5) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the
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event that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 3.4 and 11.5.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Credit Party Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
10.11 COLLATERAL AND GUARANTY MATTERS.
The Lenders irrevocably authorize each of the Agents, at its option and
in its discretion,
(a) to release any Lien on any property granted to or held by
such Agent under any Credit Document (i) upon termination of the
Commitments and payment in full of all Credit Party Obligations (other
than contingent indemnification obligations) and the expiration or
termination of all Letters of Credit, (ii) that is sold or to be sold
as part of or in connection with any sale permitted hereunder or under
any other Credit Document, or (iii) subject to Section 11.6, if
approved, authorized or ratified in writing by the Required Lenders or
the Lenders, as applicable;
(b) to subordinate any Lien on any property granted to or held
by such Agent under any Credit Document to the holder of any Lien on
such property that is permitted by Section 8.3; and
(c) to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by any Agent at any time, the Required Lenders will
confirm in writing such Agent's authority to release or subordinate its interest
in particular types or items of property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 10.11.
10.12 OTHER AGENTS; ARRANGERS AND MANAGERS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Credit Agreement as a "syndication agent,"
"documentation agent," "co-agent," "book manager," "lead manager," "arranger,"
"lead arranger" or "co-arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Credit Agreement other than, in the
case of such Lenders, those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders or other Persons so identified shall have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Credit Agreement or
in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in
writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address,
facsimile number or (subject to subsection (c) below) electronic mail
address, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:
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(i) if to the Borrower, the Administrative Agent, the
Collateral Agent or the L/C Issuer, to the address, facsimile
number, electronic mail address or telephone number specified
for such Person on Schedule 11.1 or to such other address,
facsimile number, electronic mail address or telephone number
as shall be designated by such party in a notice to the other
parties; and
(ii) if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number
specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the
Collateral Agent and the L/C Issuer.
All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant
party hereto and (ii) (A) if delivered by hand or by courier, when
signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the mails,
postage prepaid; (C) if delivered by facsimile, when sent and receipt
has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection
(c) below), when delivered; provided, however, that notices and other
communications to the Administrative Agent and the L/C Issuer pursuant
to Section 2 shall not be effective until actually received by such
Person. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures.
Credit Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to
applicable Requirement of Law, have the same force and effect as
manually-signed originals and shall be binding on all Credit Parties,
the Agents and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure
to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in Section 7.1 and 7.2, and to distribute Credit Documents for
execution by the parties thereto, and may not be used for any other
purpose.
(d) Reliance by Agents and Lenders. The Agents and the Lenders
shall be entitled to rely and act upon any notices (including
telephonic Notices of Borrowing) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof,
as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify each Agent-Related Person and each Lender
from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on
behalf of the Borrower. All telephonic notices to and other
communications with an Agent may be recorded by such Agent, and each of
the parties hereto hereby consents to such recording.
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable Law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by such Lender (including, without limitation, branches, agencies
or Affiliates of such Lender wherever located) to or for the credit or the
account of any Credit Party against obligations and liabilities of the Credit
Parties to the Lenders hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether the Administrative Agent or the Lenders shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or
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unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of such Lender subsequent thereto. The Credit Parties
hereby agree that any Person purchasing a participation in the Loans and
Commitments hereunder pursuant to Sections 3.8 or 11.3(e) may exercise all
rights of set-off with respect to its participation interest as fully as if such
Person were a Lender hereunder. Each of the Administrative Agent and the Lenders
acknowledges that a portion of the deposits and other funds of the Credit
Parties and their Subsidiaries held in accounts with the Administrative Agent
and the Lenders, if any, may consist of funds owned by one or more Affiliated
Practices but held by the Credit Parties and their Subsidiaries on behalf of
such Affiliated Practice(s).
11.3 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Credit Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender
and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of
this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) or (i) of this
Section, or (iv) to an SPC in accordance with the provisions of
subsection (g) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this
Credit Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Credit Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Credit Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b) Participation
Interests in L/C Obligations) at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund (as defined in subsection (g) of this
Section) with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding
thereunder) subject to each such assignment, determined as of the date
the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified
in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed); (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Credit Agreement with respect to the Loans
or the Commitment assigned, (iii) any assignment of a Commitment must
be approved by the Administrative Agent and the L/C Issuer unless the
Person that is the proposed assignee is itself a Lender (whether or not
the proposed assignee would otherwise qualify as an Eligible Assignee);
and (iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500. Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall
be a party to this Credit Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Credit Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender's rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 3.9, 3.12,
3.13, 3.14, and 11.5(b) with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver a Note
to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations
78
under this Credit Agreement that does not comply with this subsection
shall be treated for purposes of this Credit Agreement as a sale by
such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative
Agent's Office located in Charlotte, North Carolina a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations
owing to, each Lender pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Credit Agreement,
notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the
Borrower or any of the Borrower's Affiliates or Subsidiaries) (each, a
"Participant") in all or a portion of such Lender's rights and/or
obligations under this Credit Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations
in L/C Obligations) owing to it); provided that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this
Credit Agreement and to approve any amendment, modification or waiver
of any provision of this Credit Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 11.6 that
directly affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.9, 3.12, 3.13 and 3.14 to the same extent as
if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section. To the extent permitted by
Law, each Participant also shall be entitled to the benefits of Section
3.7 as though it were a Lender, provided such Participant agrees to be
subject to Section 3.8 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 3.9, 3.12, 3.13 or 3.14 than the applicable
Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's prior
written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 3.13
unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 3.13(f) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Credit
Agreement (including under its Note, if any) to secure obligations of
such Lender, including any pledge or assignment to secure obligations
to a Federal Reserve Bank; provided that no such pledge or assignment
shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower (an "SPC") the
option to provide all or any part of any Loan that such Granting Lender
would otherwise be obligated to make pursuant to this Credit Agreement;
provided that (i) nothing herein shall constitute a commitment by any
SPC to fund any
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Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms
hereof. Each party hereto hereby agrees that (A) neither the grant to
any SPC nor the exercise by any SPC of such option shall increase the
costs or expenses or otherwise increase or change the obligations of
the Borrower under this Credit Agreement (including its obligations
under Sections 3.9, 3.12, 3.13 and 3.14), (B) no SPC shall be liable
for any indemnity or similar payment obligation under this Credit
Agreement for which a Lender would be liable, and (C) the Granting
Lender shall for all purposes, including the approval of any amendment,
waiver or other modification of any provision of any Credit Document,
remain the lender of record hereunder. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Credit Agreement) that,
prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join any other Person in
instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceeding under the Laws of
the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without
prior consent of the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or any portion of its
right to receive payment with respect to any Loan to the Granting
Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or guarantee or
credit or liquidity enhancement to such SPC.
(h) Notwithstanding anything to the contrary contained herein,
any Lender that is a Fund may create a security interest in all or any
portion of the Loans owing to it and the Note, if any, held by it to
the trustee for holders of obligations owed, or securities issued, by
such Fund as security for such obligations or securities, provided that
unless and until such trustee actually becomes a Lender in compliance
with the other provisions of this Section 11.3, (i) no such pledge
shall release the pledging Lender from any of its obligations under the
Credit Documents and (ii) such trustee shall not be entitled to
exercise any of the rights of a Lender under the Credit Documents even
though such trustee may have acquired ownership rights with respect to
the pledged interest through foreclosure or otherwise.
(i) Notwithstanding anything to the contrary contained herein,
if at any time Bank of America assigns all of its Commitment and Loans
pursuant to subsection (b) above, Bank of America may upon 30 days'
notice to the Borrower and the Lenders, resign as L/C Issuer. In the
event of any such resignation as L/C Issuer, the Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer
hereunder; provided, however, that no failure by the Borrower to
appoint any such successor shall affect the resignation of Bank of
America as L/C Issuer. If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder
with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Lenders to make
Loans or fund risk participations pursuant to Section 2.2.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and any Agent or any Lender shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which any Agent or any Lender would otherwise have. No notice
to or demand on any Credit Party in any case shall entitle any Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agents or the Lenders to any other or
further action in any circumstances without notice or demand.
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11.5 ATTORNEY COSTS, EXPENSES, TAXES AND INDEMNIFICATION BY CREDIT
PARTIES.
(a) The Credit Parties agree (i) to pay or reimburse the
Agents and the Arranger for all reasonable costs and expenses incurred
in connection with the development, preparation, negotiation and
execution of this Credit Agreement and the other Credit Documents and
any amendment, waiver, consent or other modification of the provisions
hereof and thereof (whether or not the transactions contemplated hereby
or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all
reasonable fees and expenses of legal counsel, and (ii) to pay or
reimburse each Agent and each Lender for all costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Credit Agreement or
the other Credit Documents (including all such costs and expenses
incurred during any "workout" or restructuring in respect of the Credit
Party Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all reasonable fees
and expenses of legal counsel. The foregoing costs and expenses shall
include all search, filing, recording, and appraisal charges and fees
and taxes related thereto, and other out-of-pocket expenses incurred by
the Agents and the Arranger and the cost of independent public
accountants and other outside experts retained by either Agent, the
Arranger or any Lender. Other than costs and expenses payable in
connection with the closing of the transactions contemplated by this
Credit Agreement pursuant to Section 11.5(a) (which shall be payable on
the Closing Date unless otherwise agreed by the Agents and the
Arranger), all amounts due under this Section 11.5 shall be payable
within ten Business Days after demand therefor. The agreements in this
Section shall survive the termination of the Commitments and repayment
of all other Credit Party Obligations.
(b) Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including
the reasonable fees and expenses of legal counsel) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising
out of or in connection with (i) the execution, delivery, enforcement,
performance or administration of any Credit Document or any other
agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (ii) any Commitment, Loan or Letter
of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of
Credit), or (iii) any actual or alleged presence or release of
Hazardous Substances on or from any property currently or formerly
owned or operated by the Borrower, any Subsidiary or any other Credit
Party, or any Environmental Claim related in any way to the Borrower,
any Subsidiary or any other Credit Party, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other
theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto
(all the foregoing, collectively, the "Indemnified Liabilities"), in
all cases, whether or not caused by or arising, in whole or in part,
out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses or disbursements are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee. No Indemnitee shall be liable
for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Credit
Agreement, nor shall any Indemnitee have any liability for any indirect
or consequential damages relating to this Credit Agreement or any other
Credit Document or arising out of its activities in connection herewith
or therewith (whether before or after the Closing Date). All amounts
due under this Section 11.5 shall be payable within ten Business Days
after demand therefor. The agreements in this Section shall survive the
resignation of the either Agent, the replacement of any
81
Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all the other Credit Party Obligations.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall, without
the consent of each Lender directly affected thereby:
(a) extend the Maturity Date;
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates or as a result of waiving any
mandatory prepayment required by Section 3.3(b)) on the Loans or fees
hereunder;
(c) reduce or waive the principal amount of any Loan or extend
the time of payment thereof (other than as a result of waiving any
mandatory prepayment required by Section 3.3(b));
(d) increase or extend the Commitment of a Lender (it being
understood and agreed that a waiver of any Default or Event of Default
or a waiver of any mandatory reduction in the Commitments shall not
constitute a change in the terms of any Commitment of any Lender);
(e) release the Borrower from its obligations or consent to
the assignment or transfer by the Borrower of any of its rights and
obligations under (or in respect of) the Credit Documents, release all
or substantially all of the Guarantors from their respective
obligations under the Credit Documents or release all or substantially
all of the Collateral; provided that the Collateral Agent shall have
the authority to release Collateral sold, transferred or otherwise
disposed of pursuant to an asset disposition permitted under Section
8.4 without the consent of any Lender;
(f) amend, modify or waive any provision of this Section 11.6
or Sections 3.7, 3.8, 9.1(a), 11.2, 11.3 or 11.5; or
(g) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders.
Notwithstanding the above, (i) no provision of Section 3.4(c) may be
amended or modified without the consent of the Administrative Agent, (ii) no
provision of this Credit Agreement or any other Credit Document that addresses
the rights or obligations of either Agent (including, without limitation,
Section 10) may be amended or modified without prior written consent of such
Agent, (iii) no provision of Sections 2.2 or 3.4(b)and no other provision of
this Credit Agreement or any other Credit Document that addresses the rights or
obligations of the L/C Issuer may be amended or modified without the prior
written consent of the L/C Issuer, (iv) no amendment, waiver or consent shall
affect the rights or duties of the Alternative Rate Lender under this Credit
Agreement or any other Credit Document unless in writing and signed by the
Alternative Rate Lender and (v) any Alternative Rate Agreement (including the
Alternative Rate payable by the Borrower thereunder) and Section 3.14(b) may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the Borrower and the Alternative Rate Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then, notwithstanding the provisions of this Section 11.6, it shall not
be entitled to vote on any matter requiring the consent of the Required Lenders
or to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (A) each Lender is
entitled to vote as such Lender sees fit on any reorganization plan that affects
the Credit Party Obligation, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the
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unanimous consent provisions set forth herein and (B) the Required Lenders may
consent to allow a Credit Party to use cash collateral in the context of a
bankruptcy or insolvency proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.
(a) Survival of Indemnification. All indemnities set forth
herein shall survive the execution and delivery of this Credit
Agreement, the making of any Credit Extension and the repayment of the
Loans and other Credit Party Obligations and the termination of the
Commitments hereunder.
(b) Survival of Representations and Warranties. All
representations and warranties made hereunder and in any other Credit
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have
been or will be relied upon by the Agents and each Lender, regardless
of any investigation made by either Agent or any Lender or on their
behalf and notwithstanding that either Agent or any Lender may have had
notice or knowledge of any Default or Event of Default at the time of
any Credit Extension, and shall continue in full force and effect as
long as any Loan or any other Credit Party Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.
11.10 GOVERNING LAW; VENUE; JURISDICTION.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE
NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE
OF LAW AND CONFLICTS OF LAW RULES). Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document may be
brought in the courts of the State of North Carolina or of the United
States for the Western District of North Carolina, and, by execution
and delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its Property,
generally and unconditionally, the jurisdiction of such courts. Each
Credit Party irrevocably consents to the service of process in any
action or proceeding with respect to this Credit Agreement or any other
Credit Document by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1, such service to become effective ten days
after such mailing. Nothing herein shall affect the right of a Lender
to serve process in any other manner permitted by Law or to commence
legal proceedings or otherwise proceed against a Credit Party in any
other jurisdiction. Each Credit Party agrees that a final judgment in
any action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner
provided by Law; provided that nothing in this Section 11.10(a) is
intended to impair a Credit Party's right under applicable Law to
appeal or seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Credit Agreement or any other Credit Document in the courts
referred to in subsection (a) above and
83
hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
11.11 WAIVER OF JURY TRIAL; WAIVER OF CONSEQUENTIAL DAMAGES.
EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. Each of the parties to this
Credit Agreement agrees not to assert any claim against any other party hereto,
Administrative Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys or agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to any of the transactions contemplated herein and in
the other Credit Documents.
11.12 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.13 FURTHER ASSURANCES.
The Credit Parties agree, upon the request of the Administrative Agent,
to promptly take such actions, as reasonably requested, as is necessary to carry
out the intent of this Credit Agreement and the other Credit Documents,
including without limitation such actions as are necessary or desirable in
connection with the creation, perfection and maintenance of the security
interests of the Lenders in the Collateral.
11.14 CONFIDENTIALITY.
Each Lender agrees that it will use reasonable efforts to keep
confidential any non-public information from time to time supplied to it under
any Credit Document; provided, however, that nothing herein shall prevent the
disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Law or judicial process, (b) counsel for
a Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any Affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or Participant, or any potential assignee, transferee or Participant,
of all or any portion of any Lender's rights under this Credit Agreement who is
notified of the confidential nature of such information or (f) any other Person
in connection with (i) any litigation to which any one or more of the Lenders is
a party if required by a court of Law of competent jurisdiction or (ii) any
proceeding to enforce such Lender's rights hereunder, under any other Credit
Document or under any Hedging Agreement. No Lender shall have any obligation
under this Section 11.14 to the extent any such information becomes available on
a non-confidential basis from a source other than a Credit Party or that any
information becomes publicly available other than by a breach of this Section
11.14 by any Lender or representative thereof.
11.15 ENTIRETY.
This Credit Agreement together with the other Credit Documents and the
Fee Letter represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
11.16 BINDING EFFECT; CONTINUING AGREEMENT.
(a) This Credit Agreement shall become effective at such time
when all of the conditions set forth in Section 5.1 have been satisfied
or waived by the Lenders and it shall have been executed by the
Borrower, the Guarantors and the Administrative Agent, and the
Administrative Agent shall have received
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copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement
shall be binding upon and inure to the benefit of the Borrower, the
Guarantors, the Administrative Agent and each Lender and their
respective successors and assigns.
(b) This Credit Agreement shall be a continuing agreement and
shall remain in full force and effect until all Loans, interest, fees
and other Credit Party Obligations have been paid in full and all
Letters of Credit and Commitments have been terminated. Upon
termination, the Credit Parties shall have no further obligations
(other than the indemnification provisions and other provisions that by
their terms survive) under the Credit Documents; provided that should
any payment, in whole or in part, of the Credit Party Obligations be
rescinded or otherwise required to be restored or returned by the
Administrative Agent or any Lender, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, then the
Credit Documents shall automatically be reinstated and all amounts
required to be restored or returned and all costs and expenses incurred
by the Administrative Agent or any Lender in connection therewith shall
be deemed included as part of the Credit Party Obligations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
ORTHODONTIC CENTERS OF AMERICA, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
86
GUARANTORS:
-----------
ORTHODONTIC CENTERS OF ALABAMA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF ARIZONA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF ARKANSAS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF CALIFORNIA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF CALIFORNIA-VISTA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF COLORADO, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF CONNECTICUT,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF FLORIDA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF GEORGIA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF HAWAII, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF IDAHO, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF ILLINOIS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF INDIANA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF IOWA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF KANSAS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF KENTUCKY, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF LOUISIANA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MAINE, INC.,
a Delaware corporation
87
ORTHODONTIC CENTERS OF MARYLAND, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MASSACHUSETTS,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF MICHIGAN, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MINNESOTA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MISSISSIPPI, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF MISSOURI, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NEBRASKA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NEVADA, INC.,
a Nevada corporation
ORTHODONTIC CENTERS OF NEW HAMPSHIRE,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF NEW JERSEY, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NEW MEXICO,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF
NEW YORK, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NORTH CAROLINA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF NORTH DAKOTA,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF OHIO, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF OKLAHOMA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF OREGON, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF PENNSYLVANIA, INC.,
a Delaware corporation
00
XXXXXXXXXXX XXXXXXX XX XXXXXX XXXX,
XXX., a Delaware corporation
ORTHODONTIC CENTERS OF RHODE ISLAND,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF SOUTH CAROLINA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF TENNESSEE, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF TEXAS, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF UTAH, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF VIRGINIA, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF WASHINGTON,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF WASHINGTON
D.C., INC., a Delaware corporation
ORTHODONTIC CENTERS OF WEST VIRGINIA,
INC., a Delaware corporation
ORTHODONTIC CENTERS OF WISCONSIN, INC.,
a Delaware corporation
ORTHODONTIC CENTERS OF WYOMING, INC.,
a Delaware corporation
OCA MERGERCO, INC.,
a Delaware corporation
ORTHALLIANCE, INC.,
a Delaware corporation
ORTHALLIANCE FINANCE, INC.,
a Delaware corporation
ORTHALLIANCE PROPERTIES, INC.,
a California corporation
ORTHALLIANCE SERVICES, INC.,
a California corporation
ORTHALLIANCE HOLDINGS, INC.,
a Texas corporation
89
ORTHALLIANCE NEW IMAGE, INC.,
a Delaware corporation
PEDOALLIANCE, INC.,
a Delaware corporation
PEDOALLIANCE PROPERTIES, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Treasurer
of each of the foregoing Guarantors
90
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
in its capacity as Administrative Agent
By: /s/ Xxxxx Xxxxx
-------------------------------------------------
Name: Xxxxx Xxxxx
Title: Agency Management Officer
LENDERS:
BANK OF AMERICA, N.A.,
in its capacity as a Lender, as L/C Issuer
and as Alternative Rate Lender
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Principal
BANK ONE, NA,
in its capacity as Syndication Agent and as a Lender
By: /s/ Xxxxxx Xxxxx
-------------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
in its capacity as Documentation Agent and as a Lender
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Commercial Banking Officer
HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxxxx Xxxxxxxx
-------------------------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
91
WHITNEY NATIONAL BANK
By: /s/ Xxxxxxx Xxxxx Xxxxxxx
-------------------------------------------------
Name: Xxxxxxx Xxxxx Xxxxxxx
Title: Senior Vice President
92
