REVOLVING CREDIT AGREEMENT
DATED AS OF APRIL 24, 1997
AMONG
AMERICAN DENTAL PARTNERS, INC.,
THE LENDERS PARTY HERETO
AND
FLEET NATIONAL BANK
AS AGENT
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TABLE OF CONTENTS
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PAGE
Section 1 Definitions.......................................................... 1
1.1 Certain Definitions.................................................. 1
1.2 Accounting Terms..................................................... 12
1.3 Rules of Interpretation.............................................. 13
Section 2 Revolving Credit Loans; Letters of Credit............................ 13
2.1 Amount............................................................... 13
2.2 Revolving Credit Note................................................ 13
2.3 Lending Office....................................................... 13
2.4 Requests For Revolving Credit Loans.................................. 14
2.5 Letters of Credit.................................................... 14
2.6 Maturity of Revolving Credit Loans................................... 15
2.7 Termination or Reduction of Commitment............................... 16
2.8 Several Obligations.................................................. 16
Section 3. [Intentionally Omitted]............................................. 16
Section 4 Interest Rates; Fees; Payments....................................... 16
4.1 Interest Rates....................................................... 16
4.2 Commitment Fee....................................................... 17
4.3 Letter of Credit Fees................................................ 18
4.4 Certain Notices...................................................... 18
4.5 Non-Receipt of Funds by the Agent.................................... 18
4.6 Sharing of Payment; Waiver of Enforcement Without Consent, Etc....... 19
4.7 Minimum and Maximum Amounts.......................................... 20
4.8 Computations......................................................... 20
4.9 Manner and Place of Payment.......................................... 20
4.10 Pro Rata Treatment................................................... 21
4.11 Payments Due on Saturdays, Sundays and Holidays...................... 21
4.12 Additional Costs..................................................... 21
4.13 Limitation on Types of Loans......................................... 22
4.14 Illegality........................................................... 23
4.15 Substitute Prime Rate Loans.......................................... 23
4.16 Compensation......................................................... 23
4.17 Capital Adequacy..................................................... 24
4.18 Optional Prepayments................................................. 25
4.19 Mandatory Prepayments................................................ 25
Section 5 Security............................................................. 25
5.1 Security Interests................................................... 25
5.2 Release of Security Interests 26
Section 6 Conditions Precedent.................................................. 26
6.1 Conditions to all Loans and Letters of Credit......................... 26
Section 7 Representations and Warranties........................................ 28
7.1 Corporate Status...................................................... 29
7.2 No Violation.......................................................... 29
7.3 Corporate Power and Authority......................................... 29
7.4 Enforceability........................................................ 29
7.5 Consents or Approvals................................................. 29
7.6 Financial Statements.................................................. 29
7.7 No Material Change.................................................... 30
7.8 Litigation............................................................ 30
7.9 Compliance with Other Instruments; Compliance with Law................ 30
7.10 Subsidiaries.......................................................... 30
7.11 Investment Company Status; Limits on Ability to Incur Indebtedness.... 30
7.12 Title to Property..................................................... 31
7.13 ERISA................................................................. 31
7.14 Taxes................................................................. 31
7.15 Environmental Matters................................................. 31
7.16 Intellectual Property................................................. 32
7.17 Level of Borrowing.................................................... 32
7.18 Malpractice Insurance................................................. 32
7.19 Disclosure............................................................ 32
Section 8 Affirmative Covenants................................................. 32
8.1 Use of Proceeds....................................................... 33
8.2 Conduct of Business; Maintenance of Existence......................... 33
8.3 Compliance with Laws.................................................. 33
8.4 Insurance............................................................. 33
8.5 Financial Statements, Etc............................................. 34
8.6 Notice of Default..................................................... 35
8.7 Environmental Matters................................................. 35
8.8 Taxes and Other Liens................................................. 36
8.9 ERISA Information..................................................... 36
8.10 Inspection............................................................ 37
8.11 Certain Obligations Respecting Subsidiaries........................... 37
8.12 Further Assurances.................................................... 38
Section 9 Negative Covenants.................................................... 38
9.1 Transactions with Affiliates.......................................... 38
9.2 Consolidation, Merger or Acquisition.................................. 38
9.3 Disposition of Assets................................................. 39
9.4 Indebtedness.......................................................... 40
9.5 Guarantees............................................................ 40
9.6 Liens................................................................. 40
9.7 Restricted Payments................................................... 41
9.8 Investments........................................................... 41
9.9 ERISA................................................................. 42
9.10 Fiscal Year........................................................... 43
Section 10 Financial Covenants.................................................. 43
10.1 Debt Coverage........................................................ 43
10.2 Fixed Charges Coverage............................................... 43
10.3 Minimum Net Worth.................................................... 43
Section 11 Events of Default.................................................... 43
11.1. Events of Default.................................................... 43
11.2 Remedies Upon an Event of Default.................................... 45
Section 12. The Agent............................................................ 46
12.1. Appointment, Powers and Immunities................................... 46
12.2. Reliance by Agent.................................................... 46
12.3. Defaults............................................................. 47
12.4. Rights as a Lender................................................... 47
12.5. Events............................................................... 47
12.6. Non-Reliance on Agent and Other Lenders.............................. 48
12.7. Failure to Act....................................................... 48
12.8. Removal of Agent..................................................... 48
12.9. Collateral Sub-Agents................................................ 48
Section 13. General.............................................................. 49
13.1. Amendments, Etc...................................................... 49
13.2. Notices, Etc......................................................... 49
13.3. No Waiver; Remedies.................................................. 49
13.4. Right of Set-off..................................................... 49
13.5 Expenses; Indemnification............................................ 50
13.6 Successors and Assigns............................................... 51
13.7 Severability......................................................... 51
13.8 Governing Law........................................................ 51
13.9 Waiver of Jury Trial................................................. 51
13.10 Venue, Consent to Service of Process................................. 52
13.11 Additional Lenders................................................... 52
13.12 Headings............................................................. 52
13.13 Counterparts......................................................... 53
13.14 Confidentiality...................................................... 53
iii
EXHIBITS:
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A - Revolving Credit Note
B - Security Agreement
C - Subsidiary Security Agreement
D - Stock Pledge Agreement
E - Subsidiary Guaranty
F - Compliance Certificate
SCHEDULES:
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A - Disclosure Schedule
1 - Applicable Margin and Commitment Fees
2 - Commitments of the Lenders
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of April 24, 1997, by and among
AMERICAN DENTAL PARTNERS, INC., a Delaware corporation (the "Borrower"), having
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its principal place of business and chief executive offices at 000 Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000; FLEET NATIONAL BANK, a
national banking association, with its principal place of business at Fleet
Center, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 (together with its
successors, "Fleet"); each other lender which may from time to time become a
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signatory hereto (individually, together with its successors as well as Fleet, a
"Lender" and collectively, together with their respective successors, the
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"Lenders"); and Fleet, as agent for the Lenders (in such capacity, together
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with its successors in such capacity, the "Agent").
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WHEREAS, the Borrower has requested the Lenders to extend credit to the
Borrower in the form of loans and letters of credit and the Lenders are willing
to extend such credit upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1 Definitions.
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1.1 Certain Definitions. The following terms are used herein with
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the meanings assigned to them below:
"Accountants" shall mean KPMG Peat Marwick LLP, or another of the so-called
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"big six" accounting firms or, subject to the prior approval of the Majority
Lenders, other certified public accountants selected by the Borrower.
"Adjusted EBITDA" shall mean, (a) for any fiscal quarter ending on or prior
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to December 31, 1997, an amount equal to (i) EBITDA of the Borrower annualized
for each such period [e.g. first three months, actual first quarter EBITDA
multiplied by four; first six months, actual six month EBITDA multiplied by two,
etc.] less (ii) EBITDA for each Person acquired by the Borrower in a Permitted
----
Acquisition (each, an "Acquired Company") for such fiscal period plus (iii)
----
EBITDA for each Acquired Company on a pro forma basis for the twelve months
preceding the end of such fiscal period and (b) for any fiscal period ending
after December 31, 1997 an amount equal to (i) EBITDA of the Borrower for the
twelve month period then ended less (ii) EBITDA for each Acquired Company for
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such fiscal period plus (iii) EBITDA for each Acquired Company on a pro forma
----
basis for the twelve months preceding the end of such fiscal period, provided,
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however, that the EBITDA for Acquired Companies may be adjusted, for certain
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identified one-time savings.
"Affiliate" shall mean, with respect to any specified Person (the
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"specified person"), any Person directly or indirectly controlling, controlled
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by or under direct or indirect common
control with, the specified person and, without limiting the generality of the
foregoing, includes (i) any director, officer or, in the case of a limited
liability company, manager of the specified person or any Affiliate of the
specified person, (ii) any such director's, officer's or manager's parent,
spouse, child or child's spouse (a "relative"), (iii) any group acting in
concert, of one or more such directors, officers, managers, relatives or any
combination thereof (a "group"), (iv) any Person controlled by any such
director, officer, manager, relative or group in which any such director,
officer, manager, relative or group beneficially owns or holds 10% or more of
any class of voting securities or a 10% or greater equity or profits interest
and (v) any Person or group which beneficially owns or holds 10% or more of any
class of voting securities or membership interests or a 10% or greater equity or
profits interest in the specified person. For the purposes of this definition,
the term "control" when used with respect to any specified person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such specified person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Revolving Credit Agreement.
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"Applicable Lending Office" means, for each Lender and for each Type of
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Loan, the Lending Office of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on Schedule 2 hereof or such other office of
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such Lender (or of an affiliate of such Lender) as such Lender may from time to
time specify to the Agent and the Borrower as the office by which its Loans of
such Type are to be made.
"Applicable Margin" shall mean, in respect of any Type of Loan, the amount
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for such Type of Loan determined pursuant to Schedule 1 attached hereto.
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"Banking Day" shall mean any day, excluding Saturday and Sunday and
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excluding any other day which in The Commonwealth of Massachusetts is a legal
holiday or a day on which banking institutions are authorized by law to close.
"Borrower Group Property" shall mean any real property owned, occupied, or
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operated by the Borrower or any of its Subsidiaries.
"Capital Expenditures" shall mean all expenditures for fixed assets made by
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the Borrower or any of its Subsidiaries which are capitalized, including
expenditures related to a Capital Lease, but excluding all expenditures incurred
in connection with any Permitted Acquisition.
"Capital Lease" shall mean, as to any Person, any lease which is
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capitalized on the balance sheet of such Person in accordance with GAAP.
"Capitalization" shall mean, at any date, the sum, calculated in accordance
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with GAAP, of total stockholders equity (including preferred stock) of the
Borrower plus Total Debt.
"Capital Lease Obligations" shall mean, as to any Person, the amount of the
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obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the
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right to use) real and/or personal property which obligations are classified and
accounted for as a capital lease on a balance sheet of such Person in accordance
with GAAP (including Statement of Financial Accounting Standards No. 13, as
amended, of the Financial Accounting Standards Board).
"Closing Date" shall mean the first date on which the conditions set forth
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in Section 6.1 have been satisfied and any Loans are to be made or any Letters
of Credit are to be issued hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
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successor statute.
"Collateral" shall have the meaning given that term in the Security
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Agreement.
"Collateral Release Event" shall be deemed to have occurred when the
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Borrower shall have furnished to the Bank evidence reasonably acceptable to the
Agent (a) that the Borrower has closed an initial public offering of its capital
stock and has received net proceeds (net of costs and expenses associated with
the offering) of not less than $32,000,000; and (b) that on a pro forma basis,
after giving effect to the offering, the Borrower complies with the following
financial criteria: (i) the percentage of Total Debt to Capitalization is less
than 25%; and (ii) the ratio of Total Debt to Adjusted EBITDA is less than 3.0
to 1.0 for the twelve month period ended as of the determination date.
"Commitment" In relation to any particular Lender, the maximum dollar
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amount which such Lender has agreed to loan to the Borrower or make available to
the Borrower upon the terms and subject to the conditions of this Agreement,
initially as set forth on Schedule 2 attached hereto, as such Lender's
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Commitment may be modified pursuant hereto and in effect from time to time.
Schedule 2 shall be amended from time to time, with prior notice to the
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Borrower, to reflect any changes in the Commitments of the Lenders.
"Commitment Percentage" In relation to any particular Lender, the
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percentage which such Lender's Commitment represents of the aggregate
Commitments of all the Lenders, initially as set forth on Schedule 2 attached
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hereto, as such Lender's Commitment Percentage may be modified pursuant hereto
and in effect from time to time. Schedule 2 shall be amended from time to time
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to reflect any changes in the Commitment Percentages of the Lenders.
"Contractual Obligation" shall mean, as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled Group" shall mean all members of a controlled group of
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corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Sections 414(b) or 414(c) of the Code.
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"Default" shall mean any condition or event that constitutes an Event of
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Default or that with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Deposited Funds" shall have the meaning set forth in Section 4.6.
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"EBITDA" shall mean, for any fiscal period, an amount equal to Net Income
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for such period, plus each of the following (without duplication), to the extent
deducted in computing such Net Income: (i) Interest Expense, (ii) taxes
accrued, (iii) depreciation, and (iv) amortization of goodwill and other
intangibles.
"Environmental Laws" shall mean all federal, state, local and foreign laws,
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and all regulations, notices or demand letters issued, promulgated or entered
thereunder, relating to pollution or protection of the environment and to
occupational health and safety, including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or Hazardous Substances into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or Hazardous Substances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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amended, or any successor statutes.
"Event of Default" has the meaning set forth in Section 11.1.
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"Excluded Property" shall mean (i) any property of the Borrower or its
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Subsidiaries the purchase price of which was, or in the future may be, financed
with Indebtedness permitted by Sections 9.4(b), 9.4(c), 9.4(e), or 9.4(f) and
(ii) real property of the Borrower or its Subsidiaries the purchase price of
which was financed with Indebtedness listed on Schedule A or assumed by the
Borrower in connection with a Permitted Acquisition and (iii) leasehold
interests in any real property.
"Extension of Credit" shall mean the making of any Loan or the issuance of
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any Letter of Credit.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
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upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Banking Day next
succeeding such day, provided that (a) if such day is not a Banking Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Banking Day as so published on the next succeeding Banking Day,
and (b) if no such rate is so published on such next succeeding Banking Day, the
Federal Funds Rate for such day shall be the average rate charged to Fleet on
such day on such transactions as determined by the Agent.
"Financial Statement Date" shall mean December 31, 1996.
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"Fixed Charges" shall mean, for any fiscal period, the sum of (i) the
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amount of the scheduled installments of principal payable in respect of
Indebtedness of the Borrower and its Subsidiaries during such period, plus (ii)
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Interest Expense for such period, plus (iii) the tax provision of the Borrower
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and its Subsidiaries paid or required to be paid in cash for such period, plus
----
(iv) Maintenance Capital Expenditures made by the Borrower and its Subsidiaries
during such period, plus (v) Rental Payments, plus (vi) distributions to
---- ----
stockholders.
"Fleet" means Fleet National Bank and its successors.
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"Funding Standard Controlled Group" shall mean all members of a controlled
---------------------------------
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a single
employer under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.
"GAAP" shall mean accounting principles generally accepted in the United
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States applied on a consistent basis.
"Governmental Approval" shall mean any authorization, consent, order,
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approval, license, lease, ruling, permit, tariff, rate, certification,
validation, exemption, filing or registration by or with, or notice to, any
Governmental Authority.
"Governmental Authority" shall mean any federal, state, municipal or other
----------------------
governmental department, commission, board, bureau, agency, court, tribunal or
other instrumentality, domestic or foreign, and any arbitrator.
"Guarantee" by any Person shall mean any obligation, contingent or
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otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term Guarantee shall
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not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantors" shall mean, collectively, PDHC, Ltd., a Minnesota corporation,
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Texas Dental Partners, Inc., a Texas corporation, American Dental Partners of
Louisiana, Inc., a Delaware corporation, and Smileage Dental Care, Inc., a
Wisconsin corporation and any other Person that becomes a party to a Subsidiary
Guaranty.
"Guarantors' Documents" shall mean the Subsidiary Guaranties and the
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Subsidiary Security Agreements.
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"Hazardous Substances" shall mean all hazardous and toxic substances,
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wastes or materials, hydrocarbons (including naturally occurring or man-made
petroleum and hydrocarbons), flammable explosives, urea formaldehyde insulation,
radioactive materials, biological substances, PCBs, pesticides, herbicides and
any other kind and/or type of pollutants, or contaminates and/or any other
similar substances or materials which, because of toxic, flammable, explosive,
corrosive, reactive, radioactive or other properties that may be hazardous to
human health or the environment, are included under or regulated by any
Environmental Laws.
"Indebtedness" of any Person at any date shall mean, (a) all indebtedness
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of such Person for borrowed money (excluding current trade liabilities which
shall include payables to affiliated dental groups incurred in the ordinary
course of business and payable in accordance with customary practices), or which
is evidenced by a note, bond, debenture or similar instrument, (b) all
obligations of such Person under leases that are treated as capitalized leases
in accordance with GAAP, (c) all obligations of such Person in respect of
bankers acceptances issued or created for the account of such Person, and all
reimbursement obligations (contingent or otherwise) of such Person in respect of
any letters of credit issued for the account of such Person to the extent not
secured by cash and without duplication of any underlying Indebtedness, (d) all
liabilities secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof,
and (e) without duplication, all Guaranties.
"Intellectual Property" shall have the meaning specified in Section 7.16.
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"Interest Expense" shall mean, for any fiscal period, the sum (determined
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without duplication) of the aggregate amount of interest required to be paid
during such period on Indebtedness of the Borrower and its Subsidiaries (on a
consolidated basis), including the interest portion of payments under Capital
Lease Obligations.
"Interest Period" shall mean, with respect to any LIBOR Loan, the period
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commencing on the date such LIBOR Loan is made or converted from a Prime Rate
Loan or the last day of the next preceding Interest Period with respect to such
LIBOR Loan and ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Borrower may select as provided
in Section 4.4, except that each such Interest Period which commences on the
last Working Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Working Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the
Maturity Date; (ii) each Interest Period which would otherwise end on a day
which is not a Working Day shall end on the next succeeding Working Day (or, if
such next succeeding Working Day falls in the next succeeding calendar month, on
the next preceding Working Day); and (iii) no Interest Period shall have a
duration of less than one month and, if the Interest Period therefor would
otherwise be a shorter period, such LIBOR Loan shall not be available hereunder.
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"Investments" shall mean, with respect to any Person (the "Investor"), any
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investment by the Investor in any other Person, whether by means of share
purchase, capital contribution, purchase or other acquisition of a partnership
or joint venture interest, loan, time deposit, demand deposit or otherwise.
"Letter of Credit" shall mean any standby letter of credit issued by Fleet
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for the account of the Borrower as provided in this Agreement.
"Letter of Credit Usage" shall mean, at any time, the aggregate at such
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time of (a) the maximum amount then available to be drawn under all outstanding
Letters of Credit, and (b) all then unreimbursed drawings under any Letters of
Credit.
"LIBOR Lending Office" shall mean, initially, the Agent's office at 00
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Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 and, thereafter, such other
office of the Agent as shall be making or maintaining LIBOR Loans.
"LIBOR Loan" shall mean, at any time, that principal amount of the Loans,
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the interest on which is determined at such time on the basis of rates referred
to in the definition of "LIBOR Rate".
"LIBOR Rate" shall mean with respect to any Interest Period pertaining to a
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LIBOR Loan, the rate per annum (rounded upwards, if necessary, to the nearest
1/16th of 1%) equal to the quotient of (a) the average of the rates at which
Fleet's LIBOR Lending Office is offered U.S. Dollar deposits two Working Days
prior to the beginning of such Interest Period in the interbank eurodollar
market where the foreign currency and exchange operations of such LIBOR Lending
Office are customarily conducted at 10:00 a.m., Boston time, for delivery on the
first day of such Interest Period for the number of days comprised therein and
in an amount equal to the amount of the LIBOR Loan to be outstanding during such
Interest Period, divided by (b) a number equal to 1.00 minus the Reserve
Requirement for such LIBOR Loan during such Interest Period.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
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arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any lease
that is capitalized in accordance with GAAP, and the filing of a financing
statement under the UCC or comparable law of any jurisdiction), together with
any renewal or extension thereof.
"Loans" shall mean the Revolving Credit Loans.
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"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
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Security Instruments, the Subsidiary Guaranties, the Subsidiary Security
Agreements and all other agreements and instruments that are from time to time
executed in connection with this Agreement, as each of such agreements and
instruments may be amended, modified or supplemented from time to time.
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"Maintenance Capital Expenditures" shall mean any expenditures for fixed
--------------------------------
assets made by the Borrower or any of its Subsidiaries which are capitalized and
which are necessary to maintain the existing operations of the Borrower and its
Subsidiaries on an ongoing basis and incurred during the relevant period.
"Majority Lenders" shall mean, at any time while no Loans are outstanding,
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the Lenders having at least fifty-one percent (51%) of the aggregate amount of
the Commitments and, at any time while Loans are outstanding, Lenders holding at
least fifty-one percent (51%) of the outstanding aggregate principal amount of
the Loans.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
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business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under this Agreement, the Notes or any of
the other Loan Documents or (c) the validity or enforceability of this
Agreement, the Notes or any of the other Loan Documents or the ability of any
Subsidiary to perform its obligations under the Subsidiary Guaranty to which it
is a party, or the rights and remedies of the Agent and the Lenders hereunder or
thereunder.
"Maturity Date" shall mean April 23, 2000.
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"Maximum Rate" shall have the meaning set forth in Section 4.1(d).
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"Multiemployer Plan" shall mean at any time an employee pension benefit
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plan within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or
any member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the Controlled Group during such five year period.
"Net Income" or "Net Loss" for any period in respect of which the amount
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thereof shall be determined, shall mean the aggregate of the consolidated net
income (or net loss) after taxes for such period of the Borrower and its
Subsidiaries, determined in accordance with GAAP.
"Net Worth" shall mean, at any date as of which the amount thereof is to be
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determined, the stockholders' equity (including preferred stock) of the Borrower
and its Subsidiaries as determined in accordance with GAAP, provided that in
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determining Net Worth any preferred stock shall be treated as equity.
"Notes" shall have the meaning set forth in Section 2.2.
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"Notice Date" shall have the meaning set forth in Section 12.8.
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"Obligations" shall mean all obligations of the Borrower and its
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Subsidiaries to the Agent and the Lenders of every kind and nature whether such
obligations are now existing or hereafter incurred or created, joint or several,
direct or indirect, absolute or contingent, due or to become due, matured or
unmatured, liquidated or unliquidated, arising by contract, operation of law or
otherwise, including, without limitation, (a) all principal of and interest
(including, without
-8-
limitation, any interest which accrued after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Borrower) on any advance to the Borrower under the Notes
issued by the Borrower or pursuant to this Agreement; (b) all other amounts
(including, without limitation, any fees or expenses) payable by Borrower or the
Guarantors under the Loan Documents; (c) all amounts payable to Fleet in
connection with the issuance of any letter of credit by Fleet for the account of
any Borrower or any drawing thereunder, including, without limitation, any
reimbursement obligation and letter of credit fees payable under any letter of
credit application or reimbursement agreement executed by the Borrower in
connection with any such letter of credit; and (d) any renewals, refinancings or
extensions of any of the foregoing.
"Office of the Agent" shall mean the Banking office of the Agent located at
-------------------
00 Xxxxx Xxxxxx, Xxxxxx, XX 00000-0000 or such other location of which the
Agent shall notify the Borrower.
"Payor" shall have the meaning set forth in Section 4.5.
-----
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall have the meaning set forth in Section 9.2.
---------------------
"Permitted Liens" shall have the meaning set forth in Section 9.6.
---------------
"Person" shall mean and include any individual, firm, corporation, trust,
------
limited liability company or other unincorporated organization or association or
other enterprise or any government or political subdivision, agency, department
or instrumentality thereof.
"Plan" means any employee pension benefit plan which is covered by Title IV
----
of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (a) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled
Group or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which the Borrower or any member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Post-Default Rate" shall mean (i) with respect to any LIBOR Loan, the rate
-----------------
of interest per annum equal to 2% above the interest rate otherwise applicable
to such LIBOR Loan at the applicable time, (ii) with respect to any Prime Rate
Loan, the rate of interest per annum equal to 2% above the interest rate
otherwise applicable to such Prime Rate Loan, and (iii) with respect to any
other amount payable by the Borrower under this Agreement which is not paid when
due, the rate of interest per annum equal to 2% above the Prime Rate at the
applicable time.
-9-
"Prime Rate" shall mean the per annum rate of interest from time to time
----------
announced and made effective by Fleet as its Prime Rate (which rate may or may
not be the lowest rate available from Fleet at any given time).
"Prime Rate Loan" means at any time the principal amount of the Loans which
---------------
bears interest at the Prime Rate.
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means any change on or after the date of this Agreement
-----------------
in United States federal, state or foreign laws or regulations, including
Regulation D, or the adoption or making on or after such date of any
interpretations, directives or requests applying to a class of lenders including
any of the Lenders of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof (other than changes which affect taxes measured by or
imposed on the overall net income of any Lender or of its LIBOR Lending Office
by the jurisdiction in which the Lenders has its principal office or LIBOR
Lending Office).
"Reimbursement Obligation" shall mean the Obligation of the Borrower to
------------------------
reimburse Fleet and the Lenders on account of any drawing under any Letter of
Credit as provided in Section 2.5.
"Rental Payments" means rental payments in respect of operating lease
---------------
obligations for facilities of the Borrower and its Subsidiaries.
"Required Payment" shall have the meaning set forth in Section 4.5.
----------------
"Reserve Requirement" shall mean, for any LIBOR Loans for any Interest
-------------------
Period therefor, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by the Lenders against
"Eurocurrency liabilities" (as such term is used in Regulation D).
"Responsible Officer" shall mean the President, the Chief Financial Officer
-------------------
or the Vice President Finance.
"Restricted Payment" shall mean, with respect to the Borrower or any
------------------
Subsidiary thereof, (a) any dividend or other distribution on any shares of
capital stock of the Borrower or such Subsidiary (except dividends payable
solely to the Borrower or any Subsidiary), and (b) any payment on account of the
purchase, redemption, retirement or acquisition of (i) any shares of the capital
stock of the Borrower or a Subsidiary thereof or (ii) any option, warrant,
convertible security or other right to acquire shares of the capital stock of
the Borrower or a Subsidiary thereof, other than, in either case, payments made
solely to the Borrower or such Subsidiary.
-10-
"Revenue" for any period in respect of which the amount thereof shall be
-------
determined, shall mean the aggregate of the consolidated revenue for such period
of the Borrower and its Subsidiaries, determined in accordance with GAAP.
"Revolving Credit Commitment" shall have the meaning specified in Section
---------------------------
2.1.
"Revolving Credit Loans" shall have the meaning set forth in Section 2.1.
----------------------
"SEC" means the Securities and Exchange Commission.
---
"Security Agreement" shall have the meaning set forth in Section 5.1.
------------------
"Senior Debt" shall mean Total Debt, less the aggregate amount of
----------- ----
Subordinated Debt.
"Security Instruments" shall mean, collectively, the Security Agreement,
--------------------
the Subsidiary Security Agreements, the Stock Pledge Agreements and each other
instrument or agreement that purports to secure the Obligations of the Borrower
to the Lenders.
"Xxxxxx" shall mean Xxxxxxx X. Xxxxxx.
------
"Stated Rate" shall have the meaning set forth in Section 4.1(d).
-----------
"Stock Pledge Agreements" shall have the meaning set forth in Section 5.1.
-----------------------
"Subordinated Debt" shall mean Indebtedness of the Borrower that is
-----------------
subordinated to the Indebtedness of the Borrower owing to the Lenders either (a)
pursuant to a subordination agreement in the form (with conforming changes to
dates, parties and amounts and such other changes which, in the reasonable
judgment of the Agent, do not affect in any adverse manner the subordination of
such Indebtedness to the Indebtedness of the Borrower owing to the Lenders) of
the Subordination Agreement, dated November 11, 1996, entered into by the
Borrower in connection with its acquisition of PDHC, Ltd. and previously
provided to and approved by the Agent, (b) in such form and substance as may be
satisfactory to the Majority Lenders between the Borrower (or the Agent) and the
holder(s) of such Indebtedness, or (c) pursuant to the terms thereof, where the
Majority Lenders have confirmed in writing that such terms are satisfactory to
them.
"Subsidiary" shall mean, with respect to any Person, any corporation or
----------
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Subsidiary Collateral" shall mean the collateral of each Subsidiary
---------------------
described in the Subsidiary Security Agreements.
"Subsidiary Guaranty" shall mean the guaranty agreement, substantially in
-------------------
the form of Exhibit E hereto, entered into by each Subsidiary of the Borrower.
---------
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"Subsidiary Security Agreements" shall mean, collectively, security
------------------------------
agreements, each substantially in the form of Exhibit C hereto, entered into by
---------
each Subsidiary of the Borrower.
"Summit" means Summit Partners and its Affiliates.
------
"Total Debt" shall mean the following (without duplication) with respect to
----------
the Borrower and its Subsidiaries: (i) all indebtedness for borrowed money
(other than trade liabilities, which shall include payables to affiliated dental
groups which are classified as current liabilities on the balance sheet of the
Borrower, incurred in the ordinary course of business and payable in accordance
with customary practices); (ii) all obligations evidenced by bonds, indentures,
notes and similar instruments; (iii) all Capital Lease Obligations; and (iv) all
liabilities secured by any Lien on any property owned by the Borrower,
regardless of whether such liabilities are non-recourse.
"Trailing Twelve Month Revenue" shall mean for the twelve-month period
-----------------------------
ending on the last day of the most recently ended fiscal quarter of the Borrower
and its Subsidiaries the sum of (i) Revenue of the Borrower and its Subsidiaries
for such period determined in accordance with GAAP plus (ii) revenue of Persons
acquired in Permitted Acquisitions consummated during such twelve-month period,
determined in accordance with GAAP, that is not otherwise included in clause (i)
above.
"Type" shall mean a Prime Rate Loan or a LIBOR Loan.
----
"UCC" shall have the meaning given such term in the Security Agreement.
---
"Unfunded Liabilities" means, with respect to any Plan, at any time, the
--------------------
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent valuation date for such Plan, but only
to the extent that such excess represents a potential liability of the Borrower
or any member of the Controlled Group to the PBGC or such Plan under Title IV of
ERISA.
"Wholly-owned Subsidiary" shall mean, as to any Person, a Subsidiary of
-----------------------
such Person all of whose outstanding shares of capital stock are owned directly
or indirectly by such Person.
"Working Day" shall mean any day on which dealings in foreign currencies
-----------
and exchange between Lenders may be carried on in the place where the LIBOR
Lending Office is located and in Boston, Massachusetts.
1.2 Accounting Terms. Unless otherwise specified herein, all
----------------
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be
delivered hereunder shall be prepared, in accordance with GAAP; provided that
--------
if any change in GAAP in itself materially affects the calculation of any
financial covenant in this Agreement, the Borrower may by notice to the Agent,
or the Agent may by notice to the Borrower, require that such covenant
thereafter be calculated in accordance with GAAP as in
-12-
effect, and applied by the Borrower, immediately before such change in GAAP
occurs. If such notice is given, the compliance certificates delivered pursuant
to Section 8.5(c) after such change occurs shall be accompanied by
reconciliations of the difference between the calculation set forth therein and
a calculation made in accordance with GAAP as in effect from time to time after
such change occurs.
1.3 Rules of Interpretation.
-----------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented and in effect from
time to time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any Person includes its permitted successors and
permitted assigns.
(d) The words "include", "includes" and "including" are not limiting.
(e) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
(f) All terms not specifically defined herein or by GAAP, which terms
are defined in the Uniform Commercial Code as in effect in The Commonwealth of
Massachusetts, shall have the meanings assigned to them in such Code.
Section 2 Revolving Credit Loans; Letters of Credit.
-------- -----------------------------------------
Amount. Upon the terms and subject to conditions set forth herein,
------
and in reliance upon the representations, warranties and covenants of the
Borrower herein, the Lenders agree, severally and not jointly, to make loans
(each a "Revolving Credit Loan" and collectively the "Revolving Credit Loans")
--------------------- ----------------------
to the Borrower and Fleet hereby agrees to issue Letters of Credit for the
account of the Borrower at the Borrower' request from time to time from and
after the Closing Date and prior to the Maturity Date in an aggregate principal
amount not to exceed at any one time outstanding the sum of $30,000,000 (the
"Revolving Credit Commitment"), as the same may be reduced or terminated
----------------------------
pursuant to the provisions hereof, provided that the sum of all outstanding
--------
Revolving Credit Loans and Letter of Credit Usage shall not at any time exceed
the Revolving Credit Commitment. Within the foregoing limits and subject to the
terms and conditions hereof, the Borrower may request Letters of Credit and may
borrow, repay and reborrow Revolving Credit Loans at any time or from time to
time until the Maturity Date or the earlier termination of the Revolving Credit
Commitment.
2.2 Revolving Credit Note. The Revolving Credit Loans shall be
---------------------
evidenced by separate promissory notes for each Lender, each such note to be in
substantially the form attached hereto as Exhibit A, dated as of the Closing
---------
Date and completed with appropriate
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insertions (each such note being referred to herein as a "Note" and collectively
----
as the "Notes") and shall be payable with interest in accordance with Section 4
-----
below.
2.3 Lending Office. The Loans of each Type made by each Lender
--------------
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.4 Requests For Revolving Credit Loans. Whenever the Borrower
-----------------------------------
desires to obtain a Revolving Credit Loan or to convert an outstanding Revolving
Credit Loan from one Type to another, it shall notify the Agent in accordance
with the provisions of Section 4.4 below. Not later than 1:00 p.m. Boston time
-----------
on the date specified for each such borrowing hereunder, each Lender shall,
subject to the terms and conditions of this Agreement, make available the amount
of the Revolving Credit Loan to be made by it on such date to the Agent at the
Office of the Agent, for the account of the Borrower. Subject to the terms and
conditions of this Agreement, the amount so received by the Agent shall be made
available to the Borrower by wiring the funds to such account as the Borrower
shall specify.
2.5 Letters of Credit.
-----------------
(a) The Borrower may use the Revolving Credit Commitment for Letters
of Credit to be issued by Fleet, provided that in each case (a) the Borrower
--------
executes and delivers a letter of credit application and reimbursement agreement
reasonably satisfactory to Fleet and complies with any conditions to the
issuance of such Letter of Credit (including payment of any applicable fees);
(b) Fleet has approved the form of such Letter of Credit; (c) the requested
Letter of Credit is for a purpose permitted by Section 8.1 hereof; (d) such
Letter of Credit bears an expiration date not later than one year from its date
of issuance and not later than the Maturity Date; (e) the conditions set forth
in Section 6.1 shall have been satisfied as of the date of the issuance of the
Letter of Credit; and (f) both before the issuance of the requested Letter of
Credit and after giving effect to the issuance thereof the sum of (i) all
outstanding Revolving Credit Loans and Letter of Credit Usage shall not exceed
the Revolving Credit Commitment; and (ii) the Letter of Credit Usage shall not
exceed $3,000,000.
(b) Effective upon the issuance of each Letter of Credit and without
any further action on the part of Fleet or the Lenders in respect thereof, Fleet
hereby grants to each Lender, and each Lender hereby acquires from Fleet, a
participating interest in such Letter of Credit to the extent of such Lender's
Commitment Percentage thereof and each Lender severally agrees that it shall be
absolutely liable, without regard to the occurrence of any Default or Event of
Default, to the extent of such Lender's Commitment Percentage thereof, to
reimburse Fleet on demand for the amount of each draft paid by the Fleet under
each Letter of Credit to the extent that such amount is not reimbursed by the
Borrower.
(c) In order to induce Fleet to issue, extend and renew each Letter
of Credit, the Borrower hereby agrees to reimburse or pay to Fleet, for the
account of Fleet or (as the case may be) the Lenders, with respect to each
Letter of Credit issued, extended or renewed by Fleet hereunder, on each date
that any draft presented under any Letter of Credit is honored by Fleet or Fleet
otherwise makes payment with respect thereto, (i) the amount paid by Fleet under
or with respect to such Letter of Credit, and (ii) the amount of any reasonable
and customary fees,
-14-
charges or other costs and expenses whatsoever incurred by Fleet or any Lender
in connection with any payment made by Fleet under, or with respect to, such
Letter of Credit.
(d) If any draft shall be presented or other demand for payment shall
be made under any Letter of Credit, Fleet shall notify the Borrower of the date
and amount of the draft presented or demand for payment and of the date and time
when it expects to pay such draft or honor such demand for payment. On the date
that such draft is paid or other payment is made by Fleet, Fleet shall promptly
notify the Lenders of the amount of any unpaid Reimbursement Obligation. All
such unpaid Reimbursement Obligations with respect to Letters of Credit shall be
deemed to be Prime Rate Loans. No later than 12:00 noon (Boston time) on the
Banking Day next following the receipt of such notice, each Lender shall make
available to the Agent, at the Agent's head office, in immediately available
funds, such Lender's Commitment Percentage of such unpaid Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, times (ii) the amount equal to such
-----
Lender's Commitment Percentage of such unpaid Reimbursement Obligation, times
-----
(iii) a fraction, the numerator of which is the number of days that have elapsed
from and including the date Fleet paid the draft presented for honor or
otherwise made payment until the date on which such Lender's Commitment
Percentage of such unpaid Reimbursement Obligation shall become immediately
available to the Agent, and the denominator of which is 365. The responsibility
of Fleet to the Borrower shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
(e) The Borrower's Reimbursement Obligations shall be absolute and
unconditional under any and all circumstances and irrespective of the occurrence
of any Default or Event of Default or any condition precedent whatsoever or any
set off, counterclaim or defense to payment which the Borrower may have or have
had against Fleet, the Agent, the Lenders or any beneficiary of a Letter of
Credit. The Borrower further agrees that Fleet, the Agent and the Lenders shall
not be responsible for, and the Borrower's Reimbursement Obligations shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower, against the beneficiary of
any Letter of Credit or any such transferee.
(f) Fleet, the Agent and the Lenders shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit. The Borrower agrees that any action taken or omitted by Fleet, the
Agent or the Lenders under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of Fleet, the Agent
or the Lenders to the Borrower except, in the case of any such party, any such
liability resulted from the gross negligence or willful misconduct of such
party.
-15-
2.6 Maturity of Revolving Credit Loans. All Revolving Credit Loans
----------------------------------
shall mature and the total unpaid principal amount thereunder shall be due and
payable on the Maturity Date, at which time all amounts advanced under this
Section 2 shall be immediately due and payable.
2.7 Termination or Reduction of Commitment.
--------------------------------------
(a) The Revolving Credit Commitment shall automatically terminate at
5:00 p.m. Boston time on the Maturity Date. The Borrower, upon notice to the
Agent and each Lender in accordance with Section 4.4 and the repayment in full
of the outstanding principal balance of the Revolving Credit Loans (and accrued
interest thereon) and the payment in full of any expenses or other fees owed by
the Borrower to the Agent or any Lender under or pursuant to this Agreement, may
elect to terminate the Revolving Credit Commitment permanently, whereupon the
Commitments of the Lenders shall be terminated entirely. If any Letters of
Credit would remain outstanding after the effective date of any such
termination, in addition to the satisfaction of all other applicable terms and
conditions of this Agreement, the Borrower shall either deposit with and pledge
to Fleet cash in an amount equal to 100% of the Letter of Credit Usage at the
effective date of such termination, or (ii) arrange for the termination of such
Letters of Credit and the return thereof to Fleet. No such termination may be
reinstated.
(b) The Borrower may also, upon notice to the Agent and each Lender
in accordance with Section 4.4, reduce the Revolving Credit Commitment in
integral multiples of $500,000, whereupon the Commitments of the Lenders shall
be reduced pro rata in accordance with their respective Commitment Percentages
by the aggregate amount specified in such notice. If, as a result of any such
reduction, the aggregate outstanding balance of Revolving Credit Loans plus the
Letter of Credit Usage would exceed the Revolving Credit Commitment, the
Borrower shall, as a condition precedent to any such reduction, deposit with and
pledge to Fleet cash in an amount equal to 100% of such excess or to make
repayments of outstanding Revolving Credit Loans in an aggregate amount equal to
such excess. No such reduction may be reinstated.
2.8 Several Obligations. The failure of any Lender to make any Loan
-------------------
to be made by it on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan on such date, but neither the Agent
nor any Lender shall be responsible for the failure of any other Lender to make
a Loan to be made by such other Lender.
Section 3. [Intentionally Omitted]
-------
Section 4 Interest Rates; Fees; Payments.
--------- ------------------------------
4.1 Interest Rates.
--------------
(a) The Borrower agrees to pay to the Agent for the account of each
Lender interest on the unpaid principal amount of each Loan for each day from
and including the date such Loan is made to but excluding the date the principal
of such Loan is paid in full at the following rates per annum:
-16-
(i) for Loans which are Prime Rate Loans, at a rate per annum equal to the
Prime Rate plus the Applicable Margin; and
(ii) for Loans which are LIBOR Loans, at a rate per annum equal to the
LIBOR Rate plus the Applicable Margin.
(b) Notwithstanding the foregoing, if an Event of Default shall
occur, then at the option of the Agent or the Majority Lenders, the unpaid
balance of Loans and any other amount payable hereunder which is not paid in
full when due shall bear interest at a rate per annum equal to the Post-Default
Rate, until such Event of Default is cured or waived.
(c) Accrued interest on each Prime Rate Loan shall be payable monthly
in arrears on the first day of each month, accrued interest on LIBOR Loans shall
be payable on the last day of each Interest Period and, if any such Interest
Period is longer than three months, at intervals of three months after the first
day thereof, and interest on all Loans shall be payable in any event upon the
payment, prepayment or conversion thereof, but only on the principal so paid or
prepaid or converted; provided that interest payable pursuant to Section 4.1(b)
--------
during the pendency of an Event of Default shall be payable from time to time on
demand of the Agent. Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall notify the Borrower
and each of the Lenders thereof.
(d) Notwithstanding the foregoing provisions of this Section 4.1, if
at any time the rate of interest set forth in subparagraph (a) above (the
"Stated Rate") exceeds the maximum non-usurious interest rate permissible for
-----------
any Lender to charge a commercial borrower under applicable law (the "Maximum
-------
Rate"), the rate of interest charged on the Loans by such Lender hereunder shall
----
be limited to the Maximum Rate. In the event the Stated Rate that has
theretofore been subject to the preceding sentence at any time is less than the
Maximum Rate in respect of the Loans hereunder by any Lender, the principal
amount of the Loans shall bear interest at the Maximum Rate until the total
amount of interest paid to such Lender or accrued on such Loans by such Lender
hereunder equals the amount of interest which would have been paid to the
Lenders or accrued on the Loans by the Lenders hereunder if the Stated Rate had
at all times been in effect. In the event that upon payment in full of all
amounts payable hereunder, the total amount of interest paid to any Lender or
accrued on such Lender's Loans under the terms of this Agreement is less than
the total amount of interest which would have been paid to such Lender or
accrued on such Lender's Loans if the Stated Rate had at all times been in
effect, then the Borrower shall, to the extent permitted by applicable law, pay
to such Lender an amount equal to the difference between (a) the lesser of (i)
the amount of interest which would have accrued on the Loans if the Maximum Rate
had at all times been in effect or (ii) the amount of interest which would have
accrued on the Loans if the Stated Rate had at all times been in effect and (b)
the amount of interest actually paid to the Lenders or accrued on the Loans
under this Agreement. In the event any Lender ever receives, collects or
applies as interest any sum in excess of the Maximum Rate, such excess amount
shall be applied to the reduction of the principal balance of such Lender's
Loans or to other amounts (other than interest) payable hereunder, and if no
such principal is then outstanding, such excess or part thereof remaining shall
be paid to the Borrower.
-17-
4.2 Commitment Fee. The Borrower shall pay to the Agent for the
--------------
ratable account of each Lender quarterly in arrears on the first day of each
quarter a commitment fee on the actual daily balance of the unutilized portion
of the Commitment for the preceding quarter at a rate per annum equal to one
quarter of one percent (0.25%) based on the actual number of days elapsed in the
period based on a year of 360 days.
4.3 Letter of Credit Fees. In connection with each Letter of
---------------------
Credit, the Borrower shall pay to Fleet any applicable issuance, amendment,
transfer and similar fees in accordance with Fleet's customary charges and in
connection with the issuance of any Standby Letter of Credit shall also pay a
standby commission equal to the then effective Applicable Margin for LIBOR Loans
minus 0.125% of the total face amount of such Standby Letter of Credit.
4.4 Certain Notices. Notices to the Agent of borrowings,
---------------
conversions and prepayments of Loans, of the duration of Interest Periods and of
termination or reduction of Commitments shall be irrevocable and shall be
effective only if received by the Lenders not later than the time specified
below on the number of Banking Days prior to the date of the borrowing,
conversion, prepayment, termination or reduction specified below:
Number of Banking Time of Day
Days Prior Notice (Boston Time)
----------------- -------------
Borrowings or prepayment
of Prime Rate Loans 0 12:00 noon
Borrowings of, prepayment
of, conversion into, or
duration of Interest Periods
for LIBOR Loans 2 10:30 a.m.
Termination or reduction
of Commitments 3 12:00 noon
Each notice of borrowing, conversion or prepayment shall specify the amount, the
Type of the Loan to be borrowed, converted or prepaid, the date of borrowing,
conversion or prepayment (which shall be a Banking Day in the case of the
prepayment of a Prime Rate Loan, or a Working Day in the case of the conversion
or prepayment of a LIBOR Loan) and, in the case of LIBOR Loans, the duration of
the Interest Period therefor (subject to the definition of Interest Period).
Each such notice of duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. In the event that the Borrower fails
to select the duration of any Interest Period for any LIBOR Loan within the time
period and otherwise as provided in this Section 4.4, such LIBOR Loan will be
automatically converted into a Prime Rate Loan on the last day of the then
current Interest Period for such LIBOR Loan or (if outstanding as Prime Rate
Loans) will remain as, or (if not then outstanding) will be made as Prime Rate
Loans.
4.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have
---------------------------------
been notified by a Lender or the Borrower (the "Payor") prior to the date on
-----
which such Lender is to
-18-
make payment to the Agent of the proceeds of a Loan to be made by it hereunder
or the Borrower is to make a payment to the Agent for the account of one or more
of the Lenders, as the case may be (such payment being herein called the
"Required Payment"), which notice shall be effective upon receipt, that the
-----------------
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
pay to the Agent the amount made available to it together with interest thereon
in respect of the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such period.
4.6 Sharing of Payment; Waiver of Enforcement Without Consent, Etc.
--------------------------------------------------------------
(a) The Borrower agrees that, in addition to (and without limitation of) any
right of set-off, banker's lien or counterclaim any Lender may otherwise have,
each Lender shall be entitled, at its option and without regard to the adequacy
of any other Collateral or Subsidiary Collateral held by or for the benefit of
such Lender, to offset balances (whether based on provisional or final credits
or on collected or uncollected funds) held by it for the account of the Borrower
at any of its offices, in Dollars or in any other currency (collectively, the
"Deposited Funds"), against any principal of or interest on any Loans to the
---------------
Borrower by any Lender hereunder, or any other obligation of the Borrower
hereunder, which is not paid when due, taking into account any applicable grace
period, (regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower, the Agent and the other
Lenders thereof, provided that such Lender's failure to give such notice shall
not affect the validity thereof. The Borrower further grants to the Agent for
the benefit of the Agent and each Lender a security interest in all such
Deposited Funds, it being agreed that the possession of any such Deposited Funds
by any Lender shall be for the benefit of the Agent and the Lenders, provided,
--------
however, that nothing herein shall restrict the Borrower from using such
-------
Deposited Funds unless and until a Default or Event of Default shall have
occurred and be continuing. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Person purchasing a
participation in the Loans made, or other obligations held, by another Person,
whether or not acquired pursuant to the foregoing arrangements, may exercise all
rights of set-off, banker's lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender were a direct holder of Loans or
other obligations in the amount of such participation.
(b) The Lenders agree among themselves that no Lender shall, except
with the written consent of the Majority Lenders, exercise any right pursuant to
Section 4.6(a) or exercise, with respect to any Loans or other obligations
--------------
hereunder, any other right of set-off, banker's Lien, counterclaim or similar
right, so long as any Lender has any Commitment hereunder or any amounts due
hereunder remain unpaid.
(c) If a Lender shall obtain payment of any principal of or interest
on any Loan made by it under this Agreement, or on any other obligation then due
to such Lender hereunder, through the exercise of any right of set-off, banker's
lien, counterclaim or similar right, or otherwise, it shall promptly notify the
Agent and purchase from the other Lenders participations in the Loans made, or
other obligations held, by the other Lenders in such amounts, and make
-19-
such other adjustments from time to time as shall be equitable to the end that
all the Lenders shall share the benefit of such payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with the unpaid principal and interest on the Loans or
other obligations then due to each of them. To such end, all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored
(including the payment of interest to the extent that the Lender obligated to
return such funds is obligated to return interest).
(d) Each Lender waives all rights to enforce, and shall not attempt
to enforce, any rights hereunder, under the Notes or under any other Loan
Document without the prior written consent of the Majority Lenders. Each Lender
further agrees that all rights under the Security Instruments shall be exercised
only through the Agent under the Security Instruments.
(e) Nothing contained herein shall require any Lender to exercise any
right of set-off, banker's Lien, counterclaim or similar right or shall affect
the right of any Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation of any Borrower.
(f) This Section 4.6 is for the benefit of the Lenders only and does
-----------
not constitute a waiver of any rights against the Borrower or any of its
Subsidiaries or against any property held as security for any obligations
hereunder or under any Loan Document.
4.7 Minimum and Maximum Amounts. Each borrowing, conversion and
---------------------------
prepayment of principal of Revolving Credit Loans shall be in an aggregate
principal amount equal to (a) in the case of LIBOR Loans, $250,000 or a larger
multiple of $100,000, and (b) in the case of Prime Rate Loans, $50,000 or an
integral multiple thereof (conversions or prepayments of Revolving Credit Loans
of different Types or, in the case of LIBOR Loans, having different Interest
Periods, at the same time hereunder shall be deemed separate conversions and
prepayments for purposes of the foregoing, one for each Type or Interest
Period); provided that any payment or prepayment in full of the Loans may be in
--------
the aggregate outstanding principal amount thereof.
4.8 Computations. All interest on LIBOR Loans shall be computed on
------------
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable and all
interest on Prime Rate Loans shall be computed on the basis of a year of 365
days (or 366 days in the case of a leap year) and actual days elapsed (including
the first but excluding the last day) occurring in the period for which payable.
4.9 Manner and Place of Payment. All payments under this Agreement
---------------------------
shall be made not later than 1:00 p.m. (Boston Time) on the date when due and
shall be made in immediately available funds at the Office of the Agent for the
account of each Lender or by the Borrower's check drawn on the depositary
account(s) maintained by the Borrower with the Agent payable to the Agent for
the account of each Lender or its order. All payments shall be made without
setoff, counterclaim, withholding or reduction of any kind whatsoever. The Agent
(or any Lenders for whose account any such payment is made) may (but shall not
be obligated
-20-
to) debit the amount of any such payment on the date when due, taking into
account any applicable grace period, to any ordinary deposit account of the
Borrower with the Agent, or such Lender, as the case may be, without notice to
the Borrower. The Borrower shall, at the time of making each payment hereunder
or under any Note, specify to the Agent the Loans or other amounts payable by
the Borrower hereunder to which such payment is to be applied (and in the event
that they fail to so specify, or if an Event of Default has occurred and is
continuing, the Agent may apply such payment for the benefit of the Lenders as
it may elect in its sole discretion, but subject to the other terms and
conditions of this Agreement, including without limitation, Section 4.10
------------
hereof). Each payment received by the Agent hereunder or under any Note for the
account of a Lender shall be paid promptly to such Lender, in immediately
available funds, for the account of such Lender's Applicable Lending Office.
4.10 Pro Rata Treatment. Except to the extent otherwise provided
-------------------
herein: (a) each borrowing from the Lenders under Section 2.1 hereof shall be
-----------
made from the Lenders and the payment of the commitment fee under Section 4.2
-----------
hereof shall be made for the account of the Lenders pro rata according to the
Lenders' Commitment Percentage, (b) each payment by the Borrower of principal of
or interest on Loans of a particular Type shall be made to the Agent for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of such Loans held by the Lenders and (c) each conversion of
Loans of a particular Type shall be made pro rata among the Lenders in
accordance with the respective principal amounts of such Loans held by the
Lenders.
4.11 Payments Due on Saturdays, Sundays and Holidays. Whenever any
-----------------------------------------------
payment to be made hereunder or under the Notes shall be due on a day which is
not a Banking Day, such payment may be made on the next succeeding Banking Day,
and such extension of time shall be included in computing any interest or fees
due.
4.12 Additional Costs. The Borrower shall pay to the Agent for the
----------------
account of each Lender from time to time such amounts as such Lender may
determine to be necessary to compensate it for any costs incurred by such Lender
which such Lender determines are attributable to its making or maintaining of
any LIBOR Loans hereunder or its obligation to make any of such Loans hereunder,
or any reduction in any amount receivable by such Lender hereunder in respect of
any LIBOR Loan or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), in each case
----------------
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such Lender
under this Agreement or the Notes in respect of any LIBOR Loan; or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement, to the extent it is
taken into consideration in determining the LIBOR Rate) relating to
any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender (including any LIBOR Loan or any
deposits referred to in the definition of "LIBOR Rate" below).
-21-
Each Lender will provide the Borrower notice of any event occurring after the
date of this Agreement which will entitle such Lender to compensation pursuant
to this Section as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. Each Lender will furnish the
Borrower with a statement, in reasonable detail, setting forth the basis and
amount of each request by such Lender for compensation under this Section.
Within 30 days of the notice by such Lender, the Borrower shall pay the Agent
for the benefit of the affected Lender that portion of such increased costs
incurred or reduction in an amount received which is attributable to making,
funding and maintaining such affected Lender's Loans hereunder. If such sum is
not paid within such 30 day period, it shall bear interest at the Post Default
Rate until paid in full. The Borrower shall not be required to make any such
payment for such increased costs arising prior to the date which is one hundred
twenty (120) days before the date of such notice (unless and only to the extent
such law, rule, regulation, policy, guideline, directive or interpretation
applies retroactively to a period prior to the date which is one hundred twenty
(120) days before the date of such notice, in which case, the Borrower shall not
be required to make any payment for increased costs resulting from such
retroactive application unless such Lender provides such notice within one
hundred twenty (120) days after such rule, regulation, policy, guideline,
directive or interpretation is published in final form and the Lender reasonably
should have been aware thereof. If any affected Lender shall subsequently
recoup costs for which such Lender has heretofore been compensated by the
Borrower under this Section 4.12, such Lender shall remit to the Borrower the
amount of such recoupment.
(b) Without limiting the effect of the foregoing provisions of this
Section, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
LIBOR Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes LIBOR Loans
or (ii) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Lender so elects by
notice to the Borrower, the obligation of such Lender to make LIBOR Loans
hereunder shall be suspended until the date such Regulatory Change ceases to be
in effect.
(c) Determinations and allocations by any Lender for purposes of
this Section of the effect of any Regulatory Change on its costs of maintaining
its obligations to make LIBOR Loans or of making or maintaining LIBOR Loans or
on amounts receivable by it in respect of LIBOR Loans, and of the additional
amounts required to compensate such Lender in respect of any Additional Costs,
shall be conclusive absent manifest error, provided that such determinations and
allocations are made on a reasonable basis.
4.13 Limitation on Types of Loans. Anything herein to the contrary
----------------------------
notwithstanding, if, with respect to any LIBOR Loans, the Majority Lenders
determine in good faith (which determination shall be conclusive) that the
relevant rates of interest referred to in the definition of "LIBOR Rate" upon
the basis of which the rates of interest for any LIBOR Loan are to be determined
do not accurately reflect the cost to such Lenders of making or maintaining such
LIBOR Loans for the Interest Period therefor, then the Agent shall promptly
notify the Borrower, and so long as such condition remains in effect, the
Lenders shall be under no
-22-
obligation to convert Prime Rate Loans into LIBOR Loans and the Borrower shall,
on the last day(s) of the then current Interest Period(s) for the outstanding
LIBOR Loans, either prepay such LIBOR Loans or convert such LIBOR Loans into
Prime Rate Loans.
4.14 Illegality. Notwithstanding any other provision of this
----------
Agreement to the contrary, in the event that it becomes unlawful for any Lender
or its LIBOR Lending Office to (a) honor its obligation to make LIBOR Loans
hereunder, or (b) maintain LIBOR Loans hereunder, then such Lender shall
promptly notify the Borrower thereof (identifying the illegality in question in
reasonable detail) and such Lenders's obligation to make LIBOR Loans hereunder
shall be suspended until such time as such Lender may again make and maintain
LIBOR Loans.
4.15 Substitute Prime Rate Loans. If the obligation of any Lender
---------------------------
to make LIBOR Loans shall be suspended pursuant to Sections 4.12, 4.13 or 4.14
hereof, all Loans which would otherwise be made by such Lender as LIBOR Loans
shall be made instead as Prime Rate Loans (and, if an event referred to in
Section 4.12(b) has occurred and such Lender so requests, by notice to the
Borrower, each LIBOR Loan of such Lender then outstanding shall be automatically
converted into a Prime Rate Loan on the date specified by such Lender in such
notice) and, to the extent that LIBOR Loans are so made as (or converted into)
Prime Rate Loans, all payments of principal which would otherwise be applied to
such LIBOR Loans shall be applied instead to such Prime Rate Loans.
4.16 Compensation. If any payment, prepayment or conversion of a
------------
LIBOR Loan occurs on a date other than the last day of an Interest Period for
such Loan, the Borrower shall pay to the Agent for the account of each Lender,
upon the request of the Lender through the Agent, as compensation for any loss,
cost or expense incurred by such Lender as the result of such payment,
prepayment or conversion, an amount (if a positive number) equal to:
A x (B-C) X D
--------------------
360
where:
"A" equals the principal amount of the LIBOR Loan so paid, prepaid or
converted (the "Affected LIBOR Loan");
-------------------
"B" equals the LIBOR Rate (expressed as a decimal) applicable to the
Affected LIBOR Loan;
"C" equals the applicable LIBOR Rate (expressed as a decimal) in effect on
or about the date of such payment, prepayment or conversion, for deposits
in an amount equal approximately to the principal amount of the Affected
LIBOR Loan with an Interest Period (the "Remaining Interest Period")
-------------------------
beginning on the date of such payment, prepayment or conversion to but
excluding the last day of the existing Interest Period; and
-23-
"D" equals the number of days in the Remaining Interest Period;
and any other out-of-pocket loss or expense (including any internal processing
charge customarily charged by such Lender) suffered by such Lender in
liquidating deposits prior to maturity in amounts which correspond to the
principal amount of the Affected LIBOR Loan; provided that such Lender shall
--------
have delivered to the Borrower a certificate, in reasonable detail, as to the
amount of such loss and expense along with the basis for calculation thereof.
4.17 Capital Adequacy. If any Lender shall determine that the
----------------
applicability of any law, rule, regulation or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption after the date
hereof of any other applicable law, rule, regulation or guideline regarding
capital adequacy, or any change in the foregoing or in the enforcement,
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, or compliance by
such Lender or any Person controlling such Lender (a "Parent") with any request
------
or directive regarding capital adequacy (whether or not having the force of law)
of any such Governmental Authority, has or would have the effect of reducing the
rate of return on capital of such Lender or its Parent as a consequence of such
Lender's obligations hereunder to a level below that which such Lender (or its
Parent) could have achieved but for such applicability, adoption, change or
compliance (taking into consideration the policies of such Lender (or its
Parent) with respect to capital adequacy) by an amount reasonably deemed by such
Lender to be material, then such Lender shall provide the Borrower notice
thereof. A statement of such Lender, in reasonable detail, claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive absent manifest error;
provided that the determination thereof is made on a reasonable basis. In
--------
determining such amount, such Lender may use any reasonable averaging and
attribution methods. Within 30 days of the notification by such Lender, the
Borrower shall pay the Agent for the benefit of the affected Lender that portion
of such increased costs incurred (including any reduction in the rate of return
on capital to an amount below that which such Lender could have achieved but for
such change in regulation after taking into account the Lenders' policies as to
capital adequacy) or reduction in an amount received which is attributable to
making, funding and maintaining such affected Lender's Loans hereunder. If such
sum is not paid within such 30 day period, it shall bear interest at the Post
Default Rate until paid in full. The Borrower shall not be required to make any
such payment for such increased costs arising prior to the date which is one
hundred twenty (120) days before the date of such notice (unless and only to the
extent such law, rule, regulation, policy, guideline, directive or
interpretation applies retroactively to a period prior to the date which is one
hundred twenty (120) days before the date of such notice, in which case, the
Borrower shall not be required to make any payment for increased costs resulting
from such retroactive application unless such Lender provides such notice within
one hundred twenty (120) days after such rule, regulation, policy, guideline,
directive or interpretation is published in final form and the Lender reasonably
should have been aware thereof). If any affected Lender shall subsequently
recoup costs for which such Lender has heretofore been compensated under this
Section 4.17 by the Borrower, such Lender shall remit to the Borrower the amount
of such recoupment.
-24-
4.18 Optional Prepayments. The Borrower shall have the right to
--------------------
prepay the Loans in whole or in part and to convert Loans of one Type into
another Type, without premium or penalty, at any time and from time to time,
provided that (i) at the time of the prepayment in full of all Extensions
--------
of Credit, the Borrower shall pay all interest accrued on the amount prepaid;
(ii) the Borrower shall give the Agent notice of such prepayment as provided in
Section 4.4; (iii) LIBOR Loans may be converted into Prime Rate Loans only on
the last day of an Interest Period thereof; and (iv) the Agent for the account
of each Lender shall be paid, at the time of any prepayment of a LIBOR Loan that
is being prepaid on other than the last day of an Interest Period therefor, the
amount provided for in Section 4.16.
4.19 Mandatory Prepayments. In the event the Borrower closes any
---------------------
public offering of its capital stock, the Borrower shall be required to prepay
the Loans in an amount equal to the net proceeds (after costs and expenses
associated with such offering) received by the Borrower in such offering, less
any amounts derived from the proceeds of such offering and used by the Borrower
to redeem shares of its Series B Preferred Stock, including accrued and unpaid
dividends, outstanding as of the date hereof in accordance with the provisions
of the Borrower's Amended and Restated Certificate of Incorporation and the
Series A and Series B Preferred Stock Purchase Agreement, dated January 8, 1996,
among the Borrower and certain stockholders of the Borrower party thereto, as
amended and as in effect as of the date hereof. The Borrower represents that as
of the date hereof 70,000 shares of its Series B Preferred Stock are issued and
outstanding. The Borrower covenants and agrees that it will not, without the
prior consent of the Majority Lenders, issue any additional shares of its Series
B Preferred Stock or amend its corporate charters to modify the rights and
remedies of the holders of the Series B Preferred Stock.
Section 5 Security.
--------- --------
5.1 Security Interests.
------------------
(a) The Borrower agrees to grant to the Agent for the benefit of
the Lenders on the Closing Date a security interest in, and a lien on, all
right, title and interest of the Borrower in and to substantially all the assets
of the Borrower (excluding Excluded Property) and to enter into a security
agreement in favor of the Agent for the benefit of the Lenders in the form of
Exhibit B hereto (the "Security Agreement") in order to secure payment and
--------- ------------------
performance of the Borrower's Obligations to the Agent and the Lenders under
this Agreement, the Notes and the other Loan Documents to which it is a party.
(b) The Borrower shall cause each of its Subsidiaries to grant to
the Agent for the benefit of the Lenders on the Closing Date a security interest
in, and a lien on, all right, title and interest of each such Subsidiary in and
to substantially all the assets of each such Subsidiary and to enter into a
security agreement in favor of the Agent for the benefit of the Lenders in
substantially the form of Exhibit C hereto (collectively, the "Subsidiary
--------- ----------
Security Agreements") in order to secure payment and performance of the
-------------------
Borrower's Obligations to the Agent and the Lenders under this Agreement, the
Notes and the other Loan Documents.
-25-
(c) The Borrower agrees to enter into stock pledge agreements in
favor of the Agent for the benefit of the Lenders in the form of Exhibit D
---------
attached hereto (the "Stock Pledge Agreements") providing for the pledge to the
-----------------------
Agent for the benefit of the Lenders all outstanding capital stock of all
present and future Subsidiaries of the Borrower and to deliver to the Agent for
the benefit of the Lenders certificates representing all such shares accompanied
by undated stock powers or other appropriate instruments of transfer duly
executed in blank.
5.2 Release of Security Interests. Promptly following the
-----------------------------
occurrence of a Collateral Release Event, the Agent shall take such action as
shall be required to release, and each of the Lenders hereby consents to such
release of, the security interests in (i) the Collateral and the Subsidiary
Collateral created by the Security Instruments and (ii) the capital stock of
each Subsidiary of the Borrower pledged pursuant to the Stock Pledge Agreements
and agrees to execute and deliver to the Borrower and the Guarantors such UCC-3
termination statements and such other instruments as may be required to release
such security interests, and to return the pledged stock certificates.
Section 6 Conditions Precedent.
--------- --------------------
6.1 Conditions to all Loans and Letters of Credit. The Lenders
---------------------------------------------
shall not be obligated to make any of the Loans to the Borrower or to issue any
Letter of Credit hereunder until the following conditions have been satisfied to
the satisfaction of the Agent:
(a) This Agreement, the Notes and the Security Instruments. This
------------------------------------------------------
Agreement, the borrowings hereunder, the Notes, the Security Instruments and all
transactions contemplated by this Agreement and the Security Instruments shall
have been duly authorized by the Borrower. The Borrower shall have duly
executed and delivered to the Agent this Agreement, the Notes and the Security
Instruments in form and substance satisfactory to the Agent and its counsel.
Each of the Guarantors shall have duly executed and delivered to the Agent a
Subsidiary Guaranty substantially in the format of Exhibit E hereto and a
---------
Subsidiary Security Agreement substantially in the form of Exhibit C hereto.
---------
(b) No Default or Event of Default. On the date hereof and on the
------------------------------
date of making each Extension of Credit, no Default or Event of Default shall
have occurred and be continuing.
(c) Correctness of Representations. On the Closing Date and on the
------------------------------
date of each Extension of Credit, all representations and warranties made by the
Borrower in Section 7 below or otherwise in writing in connection herewith shall
be true and correct with the same effect as though such representations and
warranties had been made on and as of today's date, except that representations
and warranties expressly limited to a certain date shall be true and correct as
of that date.
(d) Opinion of Counsel for the Borrower. The Agent shall have
-----------------------------------
received (i) the favorable opinion of counsel to the Borrower and the Guarantors
addressed to the Agent and the Lenders and (ii) a legal memorandum from certain
local counsel to the Borrower and the Guarantors in states where the
Subsidiaries are doing business, in the case of both (i) and (ii) in form and
substance reasonably satisfactory to the Agent and its counsel.
-26-
(e) Approvals. On the Closing Date and on the date of each
---------
Extension of Credit, all necessary consents, approvals, licenses, permissions,
registrations or validations of any Governmental Authority or any other Person
required for the execution, delivery, performance or carrying out of the
provisions of this Agreement, the Notes and the Security Instruments, or for the
validity or enforceability of the obligations incurred thereunder (other than
the filing of financing statements as required under subparagraph (f) below),
shall have been obtained and shall be in full force and effect and copies
thereof certified by a duly authorized officer of the Borrower to such effect
shall have been delivered to the Agent.
(f) Filing of Financing Statements, etc. On or before the Closing
-----------------------------------
Date, financing statements or other appropriate documentation relating to the
security interests and rights granted pursuant to the Security Instruments,
executed and delivered by the Borrower to the Agent, shall have been duly
recorded or filed in such manner and in such places as is required by law
(including, pursuant to the UCC) to establish, preserve, protect, and perfect
such security interests and rights; and all taxes, fees and other charges in
connection with the execution, delivery and filing of this Agreement and such
financing statements and other appropriate documentation shall have been duly
paid.
(g) Supporting Documents. On or before the date hereof, there
--------------------
shall have been delivered to the Agent the following supporting documents:
(i) a long-form legal existence and corporate good standing certificates
with respect to the Borrower and each of the Guarantors dated as of a
recent date issued by the appropriate Secretary of State or other
official;
(ii) certificates dated as of a recent date with respect to the due
qualification of the Borrower and each of the Guarantors to do
business in each jurisdiction where the failure to be so qualified
would have a Material Adverse Effect, issued by the Secretary of State
of each such jurisdiction;
(iii) copies of the corporate charters of the Borrower and each of the
Guarantors, certified by the appropriate Secretary of State or other
officials, as in effect on the date hereof;
(iv) a certificate of the Secretary or Assistant Secretary of the Borrower
certifying as to (a) the By-Laws of the Borrower, as in effect on the
date hereof; (b) the incumbency and signatures of the officers of the
Borrower who have executed any documents in connection with the
transactions contemplated by this Agreement; and (c) the resolutions
of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement and the making of the Loans
hereunder, and the execution and delivery of the Notes and the other
Loan Documents;
(v) a certificate of the Secretary or Assistant Secretary of each
Guarantor certifying as to (a) the By-Laws of the such Guarantor, as
in effect on the date hereof; (b) the incumbency and signatures of the
officers of such Guarantor who have
-27-
executed any documents in connection with the transactions
contemplated by this Agreement; and (c) the resolutions of the Boards
of Directors of such Guarantor authorizing the execution, delivery and
performance of the Subsidiary Guaranty and Subsidiary Security
Agreement to which it is a party.
(vi) all other information and documents which the Agent or its counsel may
reasonably request in connection with the transactions contemplated by
this Agreement.
(h) Compliance Certificate. The Borrower shall have furnished to
----------------------
the Agent a Compliance Certificate in the form of attached Exhibit F
---------
appropriately completed and signed by a Responsible Officer of the Borrower,
which certificate shall reflect compliance by the Borrower with the requirements
of this Agreement as of the date thereof.
(i) Litigation. No litigation, arbitration, proceeding or
----------
investigation shall be pending or, to the knowledge of the Borrower, threatened
against any Borrower or any Subsidiary of a Borrower which, in the sole
judgement of the Agent, might have a Material Adverse Effect.
(j) Fees and Expenses. On or before the Closing Date, the Borrower
-----------------
shall have (i) paid to the Agent for the account of the Lenders all amounts
payable under Section 13.5 hereof identified by the Agent on or before the
------------
Closing Date; and (ii) paid to the Agent all fees due under a certain letter
between the Agent and the Borrower, dated the date hereof.
(k) Legal Matters. All documents and legal matters incident to the
-------------
transactions contemplated by this Agreement shall be reasonably satisfactory to
Xxxxxxxx & Worcester LLP, special counsel for the Agent.
Section 7 Representations and Warranties.
--------- ------------------------------
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the contemplated Extensions of Credit, the Borrower hereby
represents and warrants as follows (except to the extent qualified by
supplemental disclosure set forth on Schedule A hereto) and the following
----------
representations and warranties (to the extent so qualified, if any) shall
survive the execution and delivery of this Agreement and the Notes:
7.1 Corporate Status. The Borrower is a duly organized and validly
----------------
existing corporation in good standing under the laws of the State of Delaware
and is duly qualified or licensed as a foreign corporation in good standing in
each jurisdiction in which the failure to do so would have a Material Adverse
Effect.
7.2 No Violation. Neither the execution, delivery or performance
------------
of this Agreement or any other Loan Document, nor consummation of the
transactions contemplated therein or thereby will (i) contravene any law,
statute, rule or regulation to which the Borrower is subject or any judgment,
decree, franchise, order or permit applicable to the Borrower where such
contravention has or could reasonably be anticipated to have a Material Adverse
Effect, or
-28-
(ii) conflict or be inconsistent with or will result in any breach of, or
constitute a default under, or result in or require the creation or imposition
of any Lien (other than the liens created by the Security Instruments) upon any
of the property or assets of the Borrower pursuant to, any Contractual
Obligation of the Borrower, or (iii) violate any provision of the corporate
charters or by-laws of the Borrower.
7.3 Corporate Power and Authority. The execution, delivery and
-----------------------------
performance of this Agreement and the other Loan Documents to which it is a
party are within the corporate powers of the Borrower and have been duly
authorized by all necessary corporate action.
7.4 Enforceability. This Agreement and each other Loan Document
--------------
constitutes valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with its terms, except as be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and subject to general principles of
equity, whether applied in a court of equity or at law.
7.5 Consents or Approvals. No order, permission, consent,
---------------------
approval, license, authorization, registration or validation of, or filing with,
or exemption by, any Governmental Authority or any other Person is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement or any other Loan Document by the Borrower, or the
taking of any action contemplated hereby or thereby, except where the failure to
obtain such authorization could reasonably be anticipated to have a Material
Adverse Effect, and except for the filing of UCC-1 financing statements in the
appropriate UCC filing offices listed on the Perfection Certificate (as defined
in the Security Agreement).
7.6 Financial Statements. The Borrower has furnished the Agent
--------------------
with the consolidated balance sheet of the Borrower and its Subsidiaries as of
the Financial Statement Date, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year then ended, which
have been audited by the Accountants. Such financial statements, including the
related schedules and notes, fairly present the consolidated financial position
of the Borrower and its Subsidiaries as of the Financial Statement Date, and the
results of their operations and their cash flows for the year then ended in
conformity with GAAP.
(b) During the period from the Financial Statement Date to the
Closing Date: (i) except as identified in Schedule A or permitted pursuant to
----------
Section 9.3, there has been no sale, transfer or other disposition by the
Borrower or any of its Subsidiaries of any material part of their business or
property and, except as set forth in Schedule A, no purchase or other
----------
acquisition of any business or property (including any capital stock of any
Person) material in relation to the consolidated financial condition of the
Borrower and its Subsidiaries at the Financial Statement Date; and (ii) neither
the Borrower nor any of its Subsidiaries have made a Restricted Payment, or
agreed or committed to make a Restricted Payment, except as permitted pursuant
to Section 9.7.
(c) The Borrower has and, after giving effect to the Loans to be
made on the Closing Date, will have, assets (both tangible and intangible,
having a value in excess of the amount required to pay the probable liability on
their then-existing debts (whether matured or
-29-
unmatured, liquidated or unliquidated, fixed or contingent); the Borrower has
and will have access to adequate capital for the conduct of their business and
the discharge of their debts incurred in connection therewith as such debts
mature; the Borrower was not insolvent immediately prior to the making of the
Loans on the Closing Date and immediately after giving effect thereto, the
Borrower will not be insolvent.
(d) All the above-referenced financial statements (including the
related schedules and notes) have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
Accountants and disclosed therein and, in the case of interim financial
statements, subject to normal year-end adjustments and the absence of footnotes
and schedules).
7.7 No Material Change. Since the Financial Statement Date there
------------------
has been no development or event, or to the best knowledge of the Borrower, any
prospective development or event, which has had or could reasonably be
anticipated to have a Material Adverse Effect.
7.7 Litigation. There are no actions, suits or proceedings
----------
pending or threatened against or affecting the Borrower or any of its
Subsidiaries which in any one case or in the aggregate, if determined adversely
to the interests of such party, could reasonably be anticipated to have a
Material Adverse Effect.
7.9 Compliance with Other Instruments; Compliance with Law.
------------------------------------------------------
Neither the Borrower nor any of its Subsidiaries are (after taking into account
applicable cure periods) in default under any Contractual Obligation (including
any Contractual Obligation relating to any Indebtedness of the Borrower) where
such default could reasonably be anticipated to have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries are in default and or in
violation of any applicable statute, rule, writ, injunction, decree, order or
regulation of any Governmental Authority having jurisdiction over the Borrower
or its Subsidiaries which default or violation could reasonably be anticipated
to have a Material Adverse Effect.
7.10 Subsidiaries. On the Closing Date, the Borrower does not
------------
have any Subsidiaries except as set forth on attached Schedule A.
----------
7.11 Investment Company Status; Limits on Ability to Incur
-----------------------------------------------------
Indebtedness. The Borrower is not an "investment company" or a company
------------
"controlled by" an investment company within the meaning of the Investment
Company Act of 1940, as amended. The Borrower is not subject to regulation under
any Federal or State statute or regulation which limits its ability to incur
Indebtedness.
7.12 Title to Property. The Borrower and each of its Subsidiaries
-----------------
has good and marketable title to all of its properties and assets, including the
properties and assets reflected in the consolidated balance sheet of the
Borrower as of the Financial Statement Date, except such as have been disposed
of since that date in the ordinary course of business, and none of such
properties or assets is subject to any Lien except for (a) Permitted Liens, or
(b) a defect in title or other claim other than defects and claims that, in the
aggregate, would have no Material Adverse Effect. The Borrower and each of its
Subsidiaries enjoys peaceful and undisturbed possession
-30-
under all leases necessary in any material respect for the operation of their
properties and assets and no material default exists under such leases (after
taking into account applicable cure periods under said leases). All such leases
are valid and subsisting and are in full force and effect.
7.13 ERISA. The Borrower and each member of the Funding Standard
-----
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to pension plans maintained by the
Borrower or any member of the Funding Standard Controlled Group or to which the
Borrower or any member of the Funding Standard Controlled Group is obligated to
contribute, except where the failure to fulfill such obligations would not
result in the aggregate of an "accumulated funding deficiency", within the
meaning of Section 302 of ERISA, in excess of $250,000. The Borrower and each
member of the Controlled Group are in compliance in all material respects with
the presently applicable provisions of ERISA and the Code, and have not incurred
any liability to the PBGC or a Plan under Title IV of ERISA (other than to make
contributions or premium payments in the ordinary course).
7.14 Taxes. All tax returns of the Borrower and its Subsidiaries
-----
require to be filed have been timely filed (after giving effect to any permitted
extensions), all material taxes, fees and other governmental charges (other than
those being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate accruals have been established and,
in the case of ad valorem taxes or betterment assessments, no proceedings to
-- -------
foreclose any lien with respect thereto have been commenced and, in all other
cases, no notice of lien has been filed or other action taken to perfect or
enforce such lien) shown thereon which are payable have been paid. The charges
and reserves on the books of the Borrower and its Subsidiaries for all income
and other taxes are adequate, and the Borrower knows of no additional assessment
or any basis therefor. The Federal income tax returns of the Borrower and its
Subsidiaries have not been audited within the last three years, all prior audits
have been closed, and there are no unpaid assessments, penalties or other
charges arising from such prior audits.
7.15 Environmental Matters. The Borrower and each of its
---------------------
Subsidiaries have obtained all Governmental Approvals that are required for the
operation of their business under any Environmental Law, except where the
failure to so obtain a Governmental Approval would not have a Material Adverse
Effect.
(b) The Borrower and each of its Subsidiaries are in compliance
with all terms and conditions of all required Governmental Approvals and are
also in compliance with all terms and conditions of all applicable Environmental
Laws, noncompliance with which would have a Material Adverse Effect.
(c) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding, notice
or demand letter pending or, to the best knowledge of the Borrower threatened
against the Borrower or any of its Subsidiaries relating in any way to the
Environmental Laws which could have a Material Adverse Effect, and there is no
Lien of any private entity or Governmental Authority against any Borrower Group
Property, which Lien could have a Material Adverse Effect.
-31-
(d) There has been no claim, complaint, notice, or request for
information received by the Borrower or any Subsidiary with respect to any site
listed on the National Priority List promulgated pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA") 42 USC (S)
------
9601 et seq. or any state list of sites requiring investigation or cleanup with
-- ----
respect to contamination by Hazardous Substances, which claim, complaint,
notice, or request for information could have a Material Adverse Effect.
(e) To the best of the Borrower's knowledge, there has been no
release or threat of release of any Hazardous Substance at any Borrower Group
Property which would likely result in liability being imposed upon the Borrower
or any Subsidiary thereof, which liability would have a Material Adverse Effect.
7.16 Intellectual Property. The Borrower and each of its
---------------------
Subsidiaries owns or licenses such copyrights, patents, trademarks and similar
rights ("Intellectual Property") as are necessary for the conduct of its
----------------------
respective businesses as now conducted, without any known conflict with the
rights of others which would have a Material Adverse Effect.
7.17 Level of Borrowing. After giving effect to any Extensions of
------------------
Credit to be made as of the date hereof under this Agreement, the sum of all
outstanding Revolving Credit Loans and Letter of Credit Usage do not exceed the
Revolving Credit Commitment.
7.18 Malpractice Insurance. The senior management of the Borrower,
---------------------
and each of its Subsidiaries, has concluded, after the exercise of reasonable
business judgment, that such entities are not engaged in the practice of
dentistry and are not required to maintain malpractice insurance and that if
such senior management concludes after the Closing Date that such entities are
required to maintain malpractice insurance, the Borrower covenants and agrees
to, and will require each of its Subsidiaries to, obtain and maintain
comprehensive malpractice insurance against bodily injury and death with
financially sound and reputable insurance companies in such amounts and against
such risks as are usually carried by owners of similar businesses and properties
in the same general areas in which the Borrower and its Subsidiaries operate.
7.19 Disclosure. None of the representations or warranties made by
----------
the Borrower in this Agreement, or in any other document furnished to the Agent
or the Lenders by or on behalf of the Borrower in connection herewith contains
(or will contain on the Closing Date) any untrue statement of a material fact or
omits (or will omit on the Closing Date) to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under which
they are made, not misleading. There is no fact known to the Borrower on the
date of this Agreement which has any reasonable likelihood of having a Material
Adverse Effect which has not been set forth in or referred to in this Agreement.
Section 8 Affirmative Covenants.
--------- ---------------------
The Borrower covenants and agrees that for so long as this Agreement is in
effect and until the Notes, together with all interest thereon and all other
Obligations of the Borrower and the Guarantors to the Lenders are paid or
satisfied in full, unless the Majority Lenders shall otherwise consent in
writing:
-32-
8.1 Use of Proceeds. The Borrower shall use the proceeds of
---------------
Revolving Credit Loans for the working capital purposes of the Borrower and its
Subsidiaries and for Permitted Acquisitions, including for payments under
Letters of Credit and for the costs and expenses of the transactions
contemplated hereby. Without limiting the foregoing, no part of such proceeds
will be used for the purpose of purchasing or carrying any "margin security" as
such term is defined in Regulation U of the Board of Governors of the Federal
Reserve System.
8.2 Conduct of Business; Maintenance of Existence. The Borrower
---------------------------------------------
will, and will cause of each of its Subsidiaries to, continue to engage in the
business in which they are engaged and maintain its existence and comply with
all applicable statutes, rules and regulations and remain duly qualified as a
foreign corporation, licensed and in good standing in each jurisdiction where
such qualification or licensing is required by the nature of its business, the
character and location of its property, business, or the ownership or leasing of
its property, except where such noncompliance or failure to so qualify would not
have a Material Adverse Effect, and the Borrower will maintain its properties in
good operating condition, and continue to conduct its business as presently
conducted.
8.3 Compliance with Laws. The Borrower will, and will cause each of
--------------------
its Subsidiaries to, comply in all material respects with all applicable laws,
ordinances, rules, regulations and requirements of Governmental Authorities.
8.4 Insurance.
---------
(a) The Borrower will, and will cause each of its Subsidiaries to,
maintain insurance with financially sound and reputable insurance companies in
such amounts and with such deductibles and against such risks as is usually
carried by owners of similar businesses and properties in the same general areas
in which the Borrower and its Subsidiaries operate, provided that in any event
the Borrower and its Subsidiaries shall maintain or cause to be maintained (i)
insurance against casualty, loss or damage covering all property and
improvements of the Borrower and its Subsidiaries in amounts and in respect of
perils usually carried by owners of similar businesses and properties in the
same general areas in which Borrower and its Subsidiaries operate; (ii)
comprehensive general liability insurance against claims for bodily injury,
death or property damage; and (iii) workers' compensation insurance to the
extent required by applicable law. Such policies may be blanket policies
covering the Borrower and all its Subsidiaries. In the case of policies
referenced in clauses (i) and (ii) above, all such insurance shall (x) name the
Borrower and the Agent, for the benefit of the Lenders, as loss payees for
losses exceeding $250,000 and additional insureds as their interests may appear;
(y) provide that no termination, cancellation or material reduction in the
amount or material modification to the extent of coverage shall be effective
until at least 30 days after receipt by the Agent of notice thereof; and (z) be
reasonably satisfactory in all other respects to the Agent. Notwithstanding the
foregoing, from and after the occurrence of a Collateral Release Event, the
Borrower may upon a determination to such effect by its Board of Directors and
notice to the Agent, self insure, in whole or in part, for risks and claims of
the type described in clauses (i) and (ii) of the first sentence of this Section
8.4 to the extent that self insurance is normal and customary for similarly
situated businesses.
-33-
(b) The Borrower will not enter into any management service agreement
or similar agreement with an affiliated dentist or professional corporation
unless such dentist or professional corporation agrees to maintain comprehensive
malpractice insurance against claims for bodily injury and death with
financially sound and reputable insurance companies in such amounts and against
such risks as is usually carried by dentists in the same general areas in which
such dentists operate.
(c) As long as no Default or Event of Default shall have occurred and
be continuing, the Agent shall return to the Borrower any insurance proceeds it
receives in payment of a claim filed by the Borrower or any of its Subsidiaries.
8.5 Financial Statements, Etc. The Borrower will furnish to each of
-------------------------
the Lenders:
(a) within forty-five (45) days after the end of each quarter of the
Borrower (other than the fourth quarter), the unaudited consolidated balance
sheet as of the end of such period and the related consolidated statements of
operations and cash flows of the Borrower and its Subsidiaries as of and for the
three-month period and the year-to-date period ended on the last day of such
quarter and the unaudited consolidating balance sheet (which may be grouped by
geographic region after the occurrence of a Collateral Release Event) as of the
end of such period and the related unaudited consolidating statement of
operations (which may be grouped by geographic region after the occurrence of a
Collateral Release Event) for the three-month period and the year-to-date period
ended on the last day of such quarter, accompanied by a certificate of a
Responsible Officer of the Borrower to the effect that such financial statements
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as of the end of such quarter, and the consolidated results of
their operations and their consolidated cash flows for such quarter, in each
case in accordance with GAAP (except for the absence of footnotes) consistently
applied (subject to normal year-end audit adjustments);
(b) within one hundred twenty (120) days after the last day of each
year of the Borrower, the audited consolidated balance sheet and income
statement and statement of cash flows of the Borrower and its Subsidiaries as of
and for the year then ended, audited by the Accountants without any material
qualifications together with the unaudited consolidating balance sheet and
statement of operations of the Borrower and its Subsidiaries as of and for the
year then ended, together with a certificate (which may be included as part of a
Compliance Certificate) of a Responsible Officer of the Borrower to the effect
that such financial statements fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as of the end of such year and
the consolidated results of their operations for such year, in each case in
accordance with GAAP.
(c) at the time of the delivery of the quarterly and yearly financial
statements required by Sections 8.5(a) and (b) above, a Compliance Certificate
signed by a Responsible Officer of the Borrower in the form attached to this
Agreement as Exhibit F, appropriately completed;
---------
-34-
(d) copies of any management letter provided by the Accountants and
addressed to the Board of Directors of the Borrower or to the Audit Committee of
the Board of Directors of the Borrower;
(e) promptly upon becoming aware of any litigation or other
proceeding against the Borrower or any of its Subsidiaries that could reasonably
be expected to have a Material Adverse Effect, notice thereof;
(f) promptly following the request of the Majority Lenders, such
further information concerning the business, affairs and financial condition or
operations of the Borrower and its Subsidiaries as the Agent may reasonably
request;
(g) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports, proxy
statements and other materials; and
(h) promptly upon the filing thereof by the Borrower with the SEC
(and in any event within ten (10) days of such filing), copies of any
registration statements (on SEC Form X-0, X-0 or any other form) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents if such forms no longer exist).
8.6 Notice of Default. As soon as practicable, and in any event,
-----------------
within three (3) Banking Days of becoming aware of the existence of any
condition or event which constitutes a Default, the Borrower will provide the
Agent and each Lender with written notice specifying the nature and period of
existence thereof and what action the Borrower is taking or proposes to take
with respect thereto.
8.7 Environmental Matters.
---------------------
(a) The Borrower and each of its Subsidiaries shall comply with all
terms and conditions of all applicable Governmental Approvals and all applicable
Environmental Laws, except where failure to comply would not have a Material
Adverse Effect.
(b) The Borrower shall promptly notify the Agent should the Borrower
become aware of:
(i) any spill, release, or threat of release of any Hazardous
Substance at or from any Borrower Group Property or by any
Person for whose conduct the Borrower or any Subsidiary
thereof are responsible, to the extent the Borrower is
required by Environmental Laws to report such to any
Governmental Authority;
(ii) any action or notice with respect to a civil, criminal or
administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter
pending or threatened against the Borrower or any Subsidiary
thereof relating in any way to the Environmental Laws, or any
Lien of any Governmental Authority or any
-35-
other Person against any Borrower Group Property relating in
any way to the Environmental Laws;
(iii) any claim made or threatened by any Person against the
Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries thereof relating to
damage, contribution, cost recovery compensation, loss or
injury resulting from any Hazardous Substance pertaining to
such property or the business or operations of the Borrower or
such Subsidiary; and
(iv) any occurrence or condition on any real property adjoining any
Borrower Group Property known to the officers or supervisory
personnel of the Borrower or any of its Subsidiaries or other
employees having responsibility for the compliance by the
Borrower or any Subsidiary thereof with Environmental Laws,
without any independent investigation, which does cause, or
could cause, such Borrower Group Property, or any part
thereof, to contain Hazardous Substances in violation of any
Environmental Laws, or which does cause, or could cause, such
Borrower Group Property to be subject to any restrictions on
the ownership, occupancy, transferability or use thereof by
the Borrower or any of its Subsidiaries.
(c) The Borrower will, and will cause each of its Subsidiaries to, at
their own cost and expense, and within such period as may be required by
applicable law or regulation, initiate all remedial actions and thereafter
diligently prosecute such action as shall be required by law for the cleanup of
such Borrower Group Property, including all removal, containment and remedial
actions in accordance with all applicable Environmental Laws (and in all events
in a manner reasonably satisfactory to the Majority Lenders) and shall further
pay or cause to be paid, at no expense to the Agent or the Lenders, all cleanup,
administrative, and enforcement costs of applicable Government Authorities which
may be asserted against such Borrower Group Property.
8.8 Taxes and Other Liens. The Borrower will, and will cause each of
---------------------
its Subsidiaries to, pay when due all taxes, assessments, governmental charges
or levies, or claims for labor, supplies, rent and other obligations made
against it which, if unpaid, might become a Lien against the Borrower or such
Subsidiary or on its property, except liabilities being contested in good faith
and by proper proceedings, as to which adequate accruals are maintained on the
books of the Borrower or its Subsidiaries, in accordance with GAAP.
8.9 ERISA Information. If and when the Borrower or any member of the
-----------------
Controlled Group (a) gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, (b) receives notice of
complete or partial withdrawal liability under Title IV of ERISA or (c) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer
-36-
the Plan, the Borrower shall in each such instance promptly furnish to the
Lenders a copy of any such notice.
8.10 Inspection. The Borrower will permit a representative of the
----------
Agent (including any field examiner or auditor retained by the Agent) to inspect
and make copies of the Borrower's books and records, and to discuss their
affairs, finances and accounts with their officers and accountants, at such
reasonable times and places and as often as the Agent may reasonably request.
8.11 Certain Obligations Respecting Subsidiaries. (a) The Borrower
-------------------------------------------
will, and will cause each of its Subsidiaries to, take such action from time to
time as shall be necessary to ensure that the Borrower at all times owns
(subject only to the Lien of the Security Instruments) all of the issued and
outstanding shares of each class of stock of each of its Subsidiaries. Without
limiting the generality of the foregoing, the Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, transfer or otherwise dispose of any
shares of stock in any Subsidiary owned by it, or permit any of its Subsidiaries
to issue any shares of stock of any class whatsoever to any Person other than
the Borrower. In the event that any such additional shares of stock shall be
issued by any Subsidiary of the Borrower, the Borrower agrees forthwith to
deliver to the Agent pursuant to the Security Instruments the certificates
evidencing such shares of stock, accompanied by undated stock powers executed in
blank and shall take such other action as the Agent shall request to perfect the
security interest created therein pursuant to the Security Instruments.
(b) Promptly (but in any event within thirty (30) days) following
the creation of any Subsidiary (other than a shell acquisition subsidiary with
little or no assets) of the Borrower following the Closing Date, or the
acquisition of any Person by a Borrower or any Subsidiary thereof pursuant to
which such Person becomes a direct or indirect Subsidiary of the Borrower, the
Borrower (i) shall notify the Agent in writing of the creation or acquisition of
such Subsidiary and (ii) shall cause such Subsidiary to become a guarantor of
the performance of the Obligations and to execute and deliver a Subsidiary
Guaranty and such other documents, in form and substance satisfactory to the
Agent, as the Agent shall reasonably require in order to confirm the
authorization and enforceability of such guaranty.
(c) Prior to the occurrence of a Collateral Release Event and
promptly (but in any event within thirty (30) days) following the creation of
any Subsidiary (other than a shell acquisition subsidiary with little or no
assets) of the Borrower following the Closing Date, or the acquisition of any
Person by a Borrower or any Subsidiary thereof pursuant to which such Person
becomes a direct or indirect Subsidiary of the Borrower, the Borrower shall (i)
cause such Subsidiary to grant to the Agent for the benefit of the Lenders a
security interest in, and a lien on, all right, title and interest of such
Subsidiary in and to substantially all the assets of such Subsidiary (except for
Excluded Property) and to enter into a Subsidiary Security Agreement in favor of
the Agent for the benefit of the Lenders and such other documents, in form and
substance satisfactory to the Agent, as the Agent shall reasonably require in
order to confirm and perfect the authorization and enforceability of such
security interest, and (ii) forthwith deliver to the Lenders pursuant to the
Security Instruments the certificates evidencing all of the issued and
outstanding shares of stock of such Subsidiary, accompanied by undated stock
powers executed
-37-
in blank and take such other action as the Agent shall request to perfect the
security interest created therein pursuant to the Security Instruments. The
Borrower shall, and shall cause the appropriate Subsidiaries of the Borrower to,
promptly (x) execute and deliver to the Agent such number of copies as the Agent
may specify of documents creating such Liens, (y) do all other things which may
be necessary or which the Agent may reasonably request in order to confer upon
and confirm to the Agent the benefits of such security, and (z) deliver such
certificates, evidences of corporate action or other documents as the Agent may
reasonably request, all in form and substance reasonably satisfactory to the
Lenders, relating to the satisfaction of the Borrower's obligations under this
Section.
8.12 Further Assurances. The Borrower will, and will cause each of
------------------
its Subsidiaries to, execute and deliver to the Agent or any Lender any writings
and do all things necessary, effectual or reasonably requested by the Agent to
carry into effect the provisions and intent of this Agreement or any other Loan
Document.
Section 9 Negative Covenants.
--------- ------------------
The Borrower covenants and agrees that for so long as this Agreement is in
effect and until the Notes, together with all interest thereon and all other
Obligations of the Borrower and the Guarantors to the Lenders are paid or
satisfied in full, without the prior written consent of the Majority Lenders:
9.1 Transactions with Affiliates. Except as permitted by Section
----------------------------
9.8 hereof or as set forth on Schedule A, the Borrower will not, and will not
----------
permit any of its Subsidiaries to, directly or indirectly, pay any funds to or
for the account of, make any Investment in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, or engage in any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate of the Borrower, unless such transaction is not prohibited by this
Agreement, is for reasonable business or tax purposes, is in the ordinary course
of the Borrower's or such Subsidiary's business, and is upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary as those that could
be obtained in a comparable arm's length transaction with a Person that is not
an Affiliate.
9.2 Consolidation, Merger or Acquisition. (a) Neither the Borrower
------------------------------------
nor any of its Subsidiaries shall merge or consolidate with or into any other
Person, or make any acquisition of the business or assets of any other Person
except: (i) any Subsidiary of the Borrower may merge into a Borrower or any
wholly-owned Subsidiary of a Borrower; (ii) Investments to the extent permitted
by Section 9.8 hereof; and (iii) Permitted Acquisitions. For purposes hereof a
"Permitted Acquisition" is an acquisition which satisfies the following
---------------------
requirements: (A) if it involves an asset purchase, stock purchase or a merger
or consolidation, upon the consummation of which the surviving or acquired party
shall be the Borrower or a Subsidiary of the Borrower; (B) at the time of such
acquisition and after giving effect thereto no Event of Default shall have
occurred and be continuing; and (C) the conditions set forth in Section 9.2(b)
hereof shall have been satisfied with respect to the proposed acquisition.
(b) In addition to the requirements set forth in Section 9.2(a), the
following additional conditions must be satisfied with respect to each Permitted
Acquisition:
-38-
(i) Each company, business or Person to be acquired shall be engaged
in the same or a related line of business to the then current
businesses conducted by the Borrower and its Subsidiaries and
shall have EBITDA with adjustments for certain one-time saving
reasonably acceptable to the Agent for the twelve months
immediately preceding the proposed acquisition date greater than
$1.00;
(ii) With respect to any individual proposed acquisition involving
aggregate consideration in excess of $1,000,000, the Borrower
will submit a pro forma Compliance Certificate to the Agent,
which shall demonstrate that on a pro forma basis and after
giving effect to the proposed acquisition the Borrower will be
in compliance with the financial covenants set forth in Section
10. hereof.
(iii) All necessary consents, approvals, licenses, permissions,
registrations or validations of any Governmental Authority or
any other Person required for the consummation of the proposed
acquisition shall have been obtained and shall be in full force
and effect; and
(iv) With respect to any individual proposed acquisition involving an
aggregate acquisition price in excess of $10,000,000, such
acquisition shall be subject to the review (but not the
approval) of the Majority Lenders which review shall be
completed within five (5) Banking Days after the Agent and each
of the Lenders shall have received copies of the draft
acquisition agreement for such proposed acquisition and the
financial statements of the entity to be acquired (audited or
reviewed to the extent available) provided, however, that the
Borrower shall deliver to the Agent and each of the Lenders such
additional information or documents as the Agent shall
reasonably request, provided that any such additional request
shall not extend or delay the running of the aforementioned five
(5) Banking Day period.
(v) Each new Subsidiary of the Borrower formed to make such
acquisition and each Person to be acquired which becomes a
Subsidiary of the Borrower shall agree to become a guarantor of
the Obligations and shall have executed such instruments in
connection therewith as the Agent and its counsel shall
reasonably request, including without limitation a Subsidiary
Guaranty and a Subsidiary Security Agreement.
9.3 Disposition of Assets. The Borrower shall not convey, sell,
---------------------
lease, transfer or otherwise dispose of any of their property, business or
assets (including, without limitation, accounts receivable and leasehold
assets), whether now owned or hereafter acquired, except for (i) equipment or
other assets sold, leased, assigned or otherwise disposed of in the ordinary
course of business; (ii) the sale of inventory in the ordinary course of
business and (iii) other assets (excluding accounts receivable which may not be
disposed of), provided that the aggregate book value of all assets disposed of
--------
pursuant to this clause (iii) in any year shall not exceed five
-39-
percent (5%) of the consolidated total assets, determined on a pro forma basis
for completed Permitted Acquisitions, of the Borrower as of the end of any such
year.
9.4 Indebtedness. Neither the Borrower nor any of its Subsidiaries
------------
shall create, incur, assume or suffer to exist any Indebtedness, except:
(a) the Obligations;
(b) existing Indebtedness, including Subordinated Debt, if any,
listed on Schedule A hereto;
----------
(c) Capital Lease Obligations in an aggregate amount not to exceed
$250,000 at any one time outstanding; provided that after giving effect to
--------
the incurrence of any such Capital Lease Obligations, no Default or Event
of Default shall have occurred and be continuing;
(d) Subordinated Debt incurred by the Borrower after the date hereof;
provided that, after giving effect to the incurrence of such Subordinated
--------
Debt, no Default or Event of Default shall have occurred and be continuing;
(e) purchase money Indebtedness for the purchase price of equipment
and capital assets incurred in the ordinary course of business, provided
--------
that such Indebtedness does not exceed $250,000 in principal amount in the
aggregate at any time outstanding;
(f) other Indebtedness that does not exceed an amount equal to 1.5%
of Trailing Twelve Month Revenue (not including any other Indebtedness
permitted by this Section 9.4); and
-----------
(g) Indebtedness owing by the Borrower to one of its Subsidiaries or
to the Borrower from one of its Subsidiaries.
9.5 Guarantees. Neither the Borrower or any of its Subsidiaries
----------
shall create, incur or suffer to exist any obligations in respect of Guarantees
except for:
(a) the Subsidiary Guaranties;
(b) existing Guarantees, if any, listed on Schedule A hereto;
----------
(c) Guarantees entered into after the date hereof in connection
with Capital Lease Obligations and Indebtedness permitted under Section
9.4.
9.6 Liens. Neither the Borrower nor any of its Subsidiaries shall
-----
create, incur, assume or suffer to exist any Lien on any of its properties or
assets, except the following (collectively, "Permitted Liens"):
---------------
-40-
(a) Liens for taxes, fees, assessments and other governmental charges
not delinquent or being contested in good faith and by proper proceedings,
as to which adequate accruals are maintained on the books of the Borrower
in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, landlord's
or similar liens imposed by law incurred in the ordinary course of business
in respect of obligations not overdue, or being contested in good faith and
by proper proceedings and as to which adequate accruals with respect
thereto are maintained on the books of the Borrower in accordance with
GAAP;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other types of social security legislation;
(d) security deposits made to secure the performance of leases,
licenses and statutory obligations incurred in the ordinary course of
business;
(e) Liens in favor of the Agent;
(f) existing Liens, if any, listed on Schedule A hereto; provided
---------- --------
that no such Lien is spread to cover any additional property after the date
hereof, and that the principal amount of the Indebtedness secured thereby
is not increased; and
(g) Liens securing (i) Indebtedness for the purchase price of
property or the refinancing thereof (provided such refinancing does not
increase the amount of such Indebtedness) to the extent permitted by
Section 9.4(e) or (ii) Indebtedness permitted by Sections 9.4(c) or 9.4(f),
provided that in each such case (x) each such Lien is given solely to
--------
secure the purchase price of such property (or the refinancing thereof),
does not extend to any other property and is given at the time of
acquisition of such property, and (y) the Indebtedness secured thereby does
not exceed the lesser of the cost of such property or its fair market value
at the time of acquisition.
9.7 Restricted Payments. Neither the Borrower nor any of its
-------------------
Subsidiaries shall declare or make any Restricted Payment, except that (i) the
Subsidiaries may declare and make cash dividends to the Borrower, (ii) the
Borrower may make Restricted Payments in the form of stock redemption payment
of, and payments in respect of accrued and unpaid dividends on, Series B
Preferred Stock, out of public offering proceeds as contemplated by Section 4.19
hereof, and (iii) the Borrower may make payments to Xxxxxxx X. Xxxxxx for the
repurchase of stock of the Borrower held by him pursuant to Section 12 of his
Employment and Non-Competition Agreement with the Company dated as of January 8,
1996, provided, however, that the Borrower shall not use proceeds of Revolving
Credit Loans to finance any such repurchase and any such repurchase shall have
been approved by the Board of Directors of the Borrower.
9.8 Investments. Neither the Borrower nor any of its Subsidiaries
-----------
shall make, maintain or acquire any Investment in any Person other than:
-41-
(a) marketable obligations issued or guaranteed by the United States
of America having a maturity of one year or less from the date of purchase;
(b) certificates of deposit, eurodollar time deposits, commercial
paper or any other obligations of any Lender or of any other bank or
savings and loan with a minimum capital surplus of $100,000,000, with a
maturity of less than one year from the date of such Investment;
(c) commercial paper with maturities of not more than 90 days having
the highest rating then given by Xxxxx'x Investors Services, Inc. or
Standard & Poor's Corporation;
(d) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in subparagraph (a) above
entered into with any bank with a minimum capital surplus of $100,000,000;
(e) shares in money market mutual funds substantially all the assets
of which are comprised of securities and other obligations of the types
described in subparagraphs (a) through (d) above;
(f) depository accounts at any Lender;
(g) stock or obligations issued to the Borrower or any Subsidiary
thereof in settlement of claims against others by reason of an event of
bankruptcy or a composition or the readjustment of debt or a reorganization
of any debtor of the Borrower or such Subsidiary;
(h) currently existing Investments set forth on Schedule A; and
----------
(i) Investments by the Borrower in its Subsidiaries.
9.9 ERISA. The Borrower will not permit any Plan maintained by the
-----
Borrower or by any member of the Controlled Group to: (a) engage in any
"prohibited transaction" (ERISA (S)2003(c)); (b) fail to report to the Agent a
"reportable event" (ERISA (S)4043) within 30 days after its occurrence or as to
any reportable event as to which the 30-day notice period requirement of Section
4043(b) of Title IV of ERISA has been waived by the PBGC, within 30 days of such
time as the Borrower is requested to notify the PBGC of such reportable event;
(c) incur any "accumulated funding deficiency" (ERISA (S)302); (d) terminate its
existence at any time in a manner which could result in the imposition of a Lien
on the property of the Borrower or any Subsidiary thereof; or (e) fail to report
to the Agent any "complete withdrawal" or "partial withdrawal" by the Borrower
or an affiliate from a "multiemployer plan" (ERISA (S)(S)4203, 4205, and 4001,
respectively). The quoted terms are defined in the respective sections of ERISA
cited above.
9.10 Fiscal Year. The Borrower and its Subsidiaries shall not change
-----------
their fiscal year without giving the Agent notice in writing at least forty-five
(45) days prior to the effective date of such change and negotiating and
reaching agreement with the Majority Lenders as to any
-42-
changes to the financial covenants set forth in Section 10 as may be occasioned
thereby in the reasonable judgment of the Majority Lenders.
Section 10 Financial Covenants.
---------- -------------------
The Borrower covenants and agrees that so long as this Agreement is in
effect and until the Notes, together with all interest thereon and all other
Obligations of the Borrower to the Lenders are paid or satisfied in full:
10.1 Debt Coverage. The Borrower will not permit (a) the ratio of
-------------
Senior Debt to Adjusted EBITDA to exceed 3.5 to 1.0 or (b) the ratio of Total
Debt to Adjusted EBITDA to exceed 4.0 to 1.0 (3.0 to 1.0 from and after the
occurrence of a Collateral Release Event) in each case, as determined at the end
of each fiscal quarter for the four quarters then ended.
10.2 Fixed Charges Coverage. The Borrower will not permit the ratio
----------------------
of Adjusted EBITDA plus Rental Payments to Fixed Charges as determined at the
----
end of each fiscal quarter for the four quarters then ended, to be less than (i)
1.00 to 1.00 through September 30, 1997, (ii) 1.15 to 1.00 at December 31, 1997,
and (iii) 1.25 to 1.00 at the end of each quarter thereafter.
10.3 Minimum Net Worth. The Borrower shall at all times maintain Net
-----------------
Worth at the end of any fiscal quarter in an amount of not less than (i) the Net
Worth of the Borrower at December 31, 1996, minus (ii) $2,000,000, plus (iii)
----- ----
fifty percent (50%) of cumulative consolidated Net Income for the period (taken
as a single period) from December 31, 1996 through the end of such quarter,
provided, that for purposes of this clause (iii) only positive consolidated Net
--------
Income shall be included and any net losses shall be disregarded, plus (iv) one
----
hundred percent (100%) of the net proceeds of any public offering by the
Borrower of shares of its capital stock, less the amount of proceeds which are
used to redeem shares of the Borrower's Series B Preferred Stock, including
accrued and unpaid dividends.
Section 11 Events of Default.
---------- -----------------
11.1. Events of Default. The occurrence of any of the following
-----------------
events shall be an "Event of Default" hereunder:
----------------
(a) The Borrower shall default (i) in the due and punctual payment of
principal of any Loan; or (ii) in the payment of interest on any Loan or in
the payment of any other amount due under any Loan Document and such
default shall continue for more than five (5) Business Days after such
payment was due; or
(b) Any representation, warranty or statement made herein or any
other Loan Document, or in any certificate or statement furnished pursuant
to or in connection herewith or therewith, shall prove to be incorrect,
misleading or incomplete in any material respect on the date as of which
made or deemed made; or
-43-
(c) The Borrower shall default in the performance or observance of
any term, covenant or agreement on its part to be performed or observed
pursuant to Sections 8.2, 8.6, 8.10, 9.2, 9.7, 9.9, 9.10, and 10 hereof; or
(d) The Borrower shall default in the performance or observance of
any term, covenant or agreement on its part to be performed or observed
pursuant to any of the provisions of this Agreement or any other Loan
Document (other than those referred to in paragraphs (a) through (c) above)
and such default shall continue unremedied for a period of thirty (30) days
after the occurrence of such Default; or
(e) Any obligation of the Borrower or any of its Subsidiaries in
respect of any Indebtedness (other than the Notes) or any Guarantee,
including, without limitation, any Indebtedness owing to the Agent or any
Lender, which involves an aggregate amount in excess of $100,000 shall be
declared to be or shall become due and payable prior to the stated maturity
thereof and shall not be paid, or such Indebtedness or Guarantee shall not
be paid as and when the same becomes due and payable, or there shall occur
and be continuing any default under any instrument, agreement or evidence
of indebtedness relating to any such Indebtedness the effect of which is to
permit the holder or holders of such instrument, agreement or evidence of
indebtedness, or a trustee, agent or other representative on behalf of such
holder or holders, to cause such Indebtedness to become due prior to its
stated maturity and shall not be paid; or
(f) The Borrower or any of its Subsidiaries thereof shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, or (vi) take
any corporate action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the Borrower or any of its Subsidiaries in any court of
competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of the Borrower or any of its Subsidiaries or of all or any
substantial part of its assets, or (iii) similar relief in respect of the
Borrower or any of its Subsidiaries under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 days; or an
order for relief against the Borrower or any of its Subsidiaries shall be
entered in an involuntary case under the Bankruptcy Code; or
-44-
(h) A judgment or judgments for the payment of money in excess of
$250,000 (net of insurance proceeds) in the aggregate shall be rendered
against the Borrower or any of its Subsidiaries and any such judgment or
judgments shall not have been vacated, discharged, stayed or bonded pending
appeal within thirty (30) days from the entry thereof; or
(i) The Borrower or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of $250,000 which
it is obligated to pay to the PBGC or to a Plan under Title IV of ERISA; or
a notice of intent to terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $250,000 shall be filed under Title IV of ERISA by
the Borrower or any member of the Controlled Group, any plan administrator
or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to
be appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower or
any member of the Controlled Group to enforce Sections 515 or 4219(c)(5) of
ERISA; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must
be terminated; or there shall occur a complete or partial withdrawal form,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which could cause the Borrower
or one or more members of the Controlled Group to incur a current payment
obligation in excess of $250,000; or
(j) Pension plans maintained by the Borrower or any member of the
Funding Standard Controlled Group or to which the Borrower or any member of
the Funding Standard Controlled Group is obligated to contribute shall
incur in the aggregate an "accumulated funding deficiency", within the
meaning of Section 302 of ERISA, in excess of $250,000, or
(k) Any Security Instrument shall cease for any reason to be in full
force and effect or shall cease to be effective to grant a perfected
security interest in a material portion of the collateral described in such
Security Instrument with the priority stated to be granted thereby; or
(l) The individuals serving as Chief Executive Officer and Chief
Financial Officer of the Borrower on the Closing Date shall both cease, for
any reason (including, without limitation, resignation, removal or death),
to be executive officers of the Borrower within any six month period,
unless successors reasonably acceptable to the Agent replace such
individuals within a reasonable period of time after they shall have ceased
to serve; or
(m) Prior to an initial public offering of the Borrower, (i) Summit
and Xxxxxx collectively cease, for any reason, to retain and have the
unfettered ability at all times to exercise voting control over at least
twenty-five percent (25%) of the outstanding shares of voting stock of the
Borrower or (ii) Summit and Xxxxxx shall no longer have the right to
designate, elect, or cause to be elected directors representing in the
aggregate a majority of the board of directors of the Borrower.
-45-
11.2 Remedies Upon an Event of Default. If any Event of Default
---------------------------------
shall have occurred and be continuing, the Agent may (and, if directed by
Majority Lenders, shall) by notice (a) declare the Commitments terminated
(whereupon the Commitments shall be terminated) and/or (b) declare the principal
amount then outstanding of, and the accrued interest on, the Loans and
commitment fees and all other amounts payable hereunder and under the Notes to
be forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without further notice (including, without
limitation, notice of intent to accelerate), presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower; provided that in the case of the occurrence of an Event of Default
--------
with respect to the Borrower referred to in clauses (f) and (g) of Section 11.1,
the Commitments shall be automatically terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans and commitment fees and
all other amounts payable hereunder and under the Notes shall be and become
automatically and immediately due and payable, without notice (including,
without limitation, notice of intent to accelerate), presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
Section 12. The Agent.
---------- ---------
12.1. Appointment, Powers and Immunities. Each Lender hereby
----------------------------------
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent (which term as used in this Section
12 shall include reference to its Affiliates and its own and its Affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee for any Lender; (b) shall not be responsible to the
Lenders for any recitals, statements, representations or warranties contained in
this Agreement or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or
for any failure by the Borrower or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or under any other
Loan Document except to the extent requested by the Majority Lenders, and (d)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other Loan Document or any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
12.2. Reliance by Agent The Agent shall be entitled to rely upon any
-----------------
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent
-46-
accountants and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Majority
Lenders (or if required by Section 13.1 hereof, by all of the Lenders), and such
------------
instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
12.3. Defaults. The Agent shall not be deemed to have knowledge of
--------
the occurrence of a Default (other than the non-payment of principal of or
interest on Loans) unless the Agent has received notice from a Lender or the
Borrower specifying such Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Lenders (and
shall give each Lender prompt notice of each such non-payment). The Agent shall
(subject to Section 12.7 hereof) take such action with respect to such Default
------------
as shall be directed by the Majority Lenders (or if required by Section 13.1
------------
hereof, by all of the Lenders), provided that, unless and until the Agent shall
--------
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the Lenders.
12.4. Rights as a Lender. With respect to its Commitments and the
------------------
Loans made by it, Fleet in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include Fleet in its individual
capacity. The Agent may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Borrower (and any of their Affiliates) as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrower (in addition to the agency fees and arrangement
fees heretofore agreed to between the Borrower and the Agent) for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
12.5. Events. The Lenders agree to indemnify the Agent (to the
------
extent not reimbursed under Section 13.5 hereof), but without limiting the
------------
obligations of the Borrower under said Section 13.5, ratably in accordance with
------------
their respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the Borrower is
obligated to pay under Section 13.5 hereof but excluding, unless a Default has
------------
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Lender
--------
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified and provided
--------
further that nothing in this Section 12.5 shall require any Lender to reimburse
------- ------------
the Agent for internal overhead.
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12.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees
---------------------------------------
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Agent shall not be under any obligation to any Lender
to ascertain or to inquire as to the performance or observance by the Borrower
of this Agreement or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Borrower. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder or the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Affiliates) which may come into the possession of the Agent.
12.7. Failure to Act. Except for action expressly required of the
--------------
Agent hereunder and under the other Loan Documents, the Agent shall in all cases
be fully justified in failing or refusing to act hereunder and thereunder unless
it shall receive further assurances to its satisfaction by the Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
------------
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
12.8. Removal of Agent. Subject to the appointment and acceptance of
----------------
a successor Agent as provided below, the Agent may be removed at any time with
or without cause by the Majority Lenders. Upon any such removal the Majority
Lenders shall have the right to appoint a successor Agent reasonably acceptable
to the Borrower. If no successor Agent shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days after
the Majority Lenders' removal of the retiring Agent (the "Notice Date"), then
-----------
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
reasonably acceptable to the Borrower. Any successor Agent shall be (i) a Lender
or (ii) if no Lender has accepted such appointment within 30 days after the
Notice Date, a bank which has an office in Boston, Massachusetts with a combined
capital and surplus of at least $200,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's removal
hereunder as Agent, the provisions of this Section 12 shall continue in effect
----------
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent. The Agent may upon notice thereof to the
Borrower and the Lenders, but subject to the prior written consent of the
Borrower, resign, in which case the procedures for appointing a successor Agent
set forth in this Section 12.8 shall be followed as though the Agent had been
removed by the Majority Lenders.
12.9. Collateral Sub-Agents. Each Lender by its execution and
---------------------
delivery of this Agreement agrees, as contemplated by the Security Instruments,
that, in the event it shall hold any Liquid Investments referred to therein,
such Liquid Investments shall be held in the name
-48-
and under the control of such Lender and such Lender shall hold such Liquid
Investments as a collateral sub-agent for the Agent thereunder.
Section 13. General.
---------- -------
13.1. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders and the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall,
--------
unless in writing and signed by all the Lenders, do any of the following: (i)
increase any Commitment of any of the Lenders or subject the Lenders to any
additional obligations; (ii) reduce the principal of, or interest on, any Loan
or fees hereunder; (iii) postpone any date fixed for any payment of principal
of, or interest on, any Loan, or fee hereunder; (iv) change the percentage of
any of the Commitments or of the aggregate unpaid principal amount of any of the
Loans, or the number of Lenders, which shall be required for the Lenders or any
of them to take any action under this Agreement; (v) change any provision
contained in Sections 2.1, 4.12, through 4.19, 13.5 or this Section 13.1 hereof;
-------- --- ---- ---- ---- ------------
(vi) release any substantial portion of the security for the Obligations of the
Borrower under this Agreement or any Note, except for dispositions permitted
under Sections 5.2 or 9.3;(vii) modify the definition of "Majority Lenders" as
------------ ---
set forth in Section 1.1; or (viii) in those provisions where consent or
-----------
approval by the Majority Lenders is required, eliminate the requirement of such
consent or approval. Notwithstanding anything in this Section 13.1 to the
------------
contrary, no amendment, waiver or consent shall be made with respect to Section
-------
12 without the consent of the Agent.
--
13.2. Notices, Etc. Unless otherwise specified herein, all notices
------------
hereunder to any party hereto shall be in writing and shall be deemed to have
been given when delivered by hand, or when sent by electronic facsimile
transmission or by telex, answer back received, or on the first Banking Day
after delivery to any overnight delivery service, freight pre-paid, or three
days after being sent by certified or registered mail, return receipt requested,
postage pre-paid, and addressed to such party at its address indicated on
Schedule 2 hereto; or at any other address specified by such party in writing
----------
except that notices to the Agent pursuant to Section 4 shall not be effective
until received by the Agent.
13.3. No Waiver; Remedies. No failure on the part of the Agent or
-------------------
the Lenders to exercise, and no delay in exercising, any right hereunder, under
the Notes or under any of the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder, under
the Notes or under any of the other Loan Documents preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
13.4. Right of Set-off. Upon the occurrence and during the
----------------
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any and all
of the
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obligations of the Borrower now or hereafter existing under this Agreement and
the Notes, irrespective of whether or not such Lender shall have made any demand
hereunder.
(b) Each Lender agrees promptly to notify the Borrower, the Agent and
the other Lenders after any such set-off and application, provided that the
--------
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lenders under this Section 13.4 are in addition
------------
to other rights and remedies (including, without limitation, other rights of
set-off) which the Lenders may have.
13.5 Expenses; Indemnification. The Borrower shall pay on demand
-------------------------
(i) the reasonable fees and disbursements of counsel to the Agent in connection
with the preparation of this Agreement and the preparation or review of each
agreement, opinion, certificate and other document referred to in or delivered
pursuant hereto which shall not exceed $75,000; (ii) all out-of-pocket costs and
expenses of the Agent in connection with the administration of this Agreement
and the other Loan Documents, and any waiver or amendment of any provision
hereof or thereof, including without limitation, the reasonable fees and
disbursements of counsel for the Agent; and (iii) if any Default or Event of
Default occurs, all reasonable costs and expenses incurred by the Agent and the
Lenders, including the reasonable fees and disbursements of counsel to the Agent
and the Lenders, and of any field examiners, auditors, appraisers, environmental
engineers or consultants, or investment banking firms retained by the Agent and
the Lenders in connection with such Event of Default or collection, bankruptcy,
insolvency and other enforcement proceedings related thereto. The Borrower
agrees to pay, indemnify and hold the Agent and the Lenders harmless from, any
and all recording and filing fees, and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise or other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of or the consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement or the other
Loan Documents, or any documents delivered pursuant hereto or thereto.
(b) The Borrower agree to indemnify the Agent and the Lenders and
their respective officers and directors and hold the Agent and the Lenders and
their respective officers and directors harmless from and against any and all
liabilities, losses, damages, reasonable costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of counsel
for the Agent and each Lender in connection with any investigative,
administrative or judicial proceeding initiated by a third party, whether or not
the Agent or any Lender shall be designated a party thereto) which may be
incurred by the Agent or any Lender, relating to or arising out of this
Agreement or any other Loan Document, or the existence of any Hazardous
Substance on, in, or under any Borrower Group Property, or any violation of any
applicable Environmental Laws for which the Borrower or any Subsidiary thereof
has any liability or which occurs upon any Borrower Group Property, or the
imposition of any Lien under any Environmental Laws, provided that neither the
--------
Agent nor any Lender shall not have the right to be indemnified hereunder for
its own bad faith, gross negligence or willful misconduct as finally determined
by a court of competent jurisdiction.
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(c) The agreements in this Section 13.5 shall survive the repayment
------------
of the Notes, and all other amounts payable under this Agreement and the other
Loan Documents.
13.6 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective successors
and assigns except that the Borrower may not assign its rights or obligations
hereunder or under the Notes without the prior written consent of all of the
Lenders. Each Lender may (without the consent of any other party to this
Agreement) sell participations in all or any part of the Loans to another bank
or other entity, in which event the participant shall not have any rights under
this Agreement (except as provided in the next succeeding sentence hereof), or
in the case of a Loan, such Lender's Note (the participant's rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto, which
agreement shall not give the participant the right to consent to any
modification, amendment or waiver other than one described in clauses (i), (ii),
(iii) or (vi) of Section 13.1 hereof); provided that each such participation
---- ------------ --------
shall be in an amount not less than $5,000,000, and further provided that no
--------------------
participant shall be entitled to receive any greater amount pursuant to such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by it to such participant
had no such transfer occurred. Each Lender may furnish any information
concerning the Borrower, its Subsidiaries and any other Loan Party in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants). The Agent and the Borrower
may, for all purposes of this Agreement, treat any Lender as the holder of any
Note drawn to its order (and owner of the Loans evidenced thereby) until written
notice of assignment, participation or other transfer shall have been received
by them from such Lender. Notwithstanding any other provision of this Section
-------
13.6, Fleet agrees for the benefit of the Borrower to retain for its own account
----
a principal amount of the Loans and a portion of the Revolving Credit Commitment
equal in the aggregate to at least 50% of the principal amount from time to time
outstanding of the Loans and of the Revolving Credit Commitment.
13.7 Severability. Any provision of this Agreement which is
------------
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
13.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REGARD TO CONFLICTS OF LAWS RULES).
13.9 WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS AND THE BORROWER
--------------------
AGREE THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON,
OR ARISING OUT OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR
THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY
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TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE
BEEN FULLY DISCUSSED BY THE AGENT, THE LENDERS AND THE BORROWER, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER THE AGENT, THE LENDERS
NOR THE BORROWER HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS
OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
13.10 VENUE, CONSENT TO SERVICE OF PROCESS. THE BORROWER ACCEPT FOR
------------------------------------
THEMSELVES AND IN CONNECTION WITH THEIR PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT
OR PROCEEDING OF ANY KIND AGAINST THEM WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT, THE NOTES, ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IRREVOCABLY AGREE TO BE BOUND BY ANY FINAL JUDGMENT RENDERED
BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING IN WHICH THEY SHALL
HAVE BEEN SERVED WITH PROCESS IN THE MANNER HEREINAFTER PROVIDED, SUBJECT TO
EXERCISE AND EXHAUSTION OF ALL RIGHTS OF APPEAL AND TO THE EXTENT THAT THEY MAY
LAWFULLY DO SO, WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING ANY CLAIMS THAT THEY ARE NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THEIR PROPERTY IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER, AND AGREE THAT PROCESS MAY BE SERVED UPON THEM IN ANY SUCH ACTION,
SUIT OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL LAWS OF
MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR RULE 4 OF
THE FEDERAL RULES OF CIVIL PROCEDURE.
13.11 Additional Lenders. The Borrower, each of the Lenders and the
------------------
Agent may at any time agree to add one or more lenders to this agreement
pursuant to an instrument in writing specifying such new lender's "commitments"
(and the reduction in commitments of the existing Lenders as a result thereof)
in such manner as the Borrower, each of the Lenders and the Agent shall agree.
Upon the execution of such instrument (and the satisfaction of such conditions
and other terms as shall therein be specified) such additional lender or lenders
shall be deemed a "lender" or "lenders" for the purposes of this agreement and
shall enjoy all rights and assume all obligations on the part of the Lenders set
forth in this agreement, and the Lenders whose commitments are then being
reduced shall be released from their commitments to the extent of such
reduction.
13.12 Headings. Section headings in this Agreement are included
--------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
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13.13 Counterparts. This Agreement may be signed in one or more
------------
counterparts each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument.
13.14 Confidentiality. The Agent and each Lender will keep
---------------
confidential all Confidential Information (as defined below) and will not,
without the Borrower's consent, disclose the same to any person other than to
directors, officers, employees, agents or other representatives (including
attorneys, accountants and financial advisers) of the Agent or any Lender or
prospective Lender or any of their respective Affiliate and other than to any
governmental agency or authority in accordance with applicable laws, rules or
regulations. As used herein, the term "Confidential Information" shall mean only
information prepared by the Borrower and furnished to the Lenders or obtained by
the Lenders hereunder which consists of financial statements and projections of
the Borrower, the Borrower's form of management agreement, business plan, and
documents with respect to acquisitions by the Borrower or which is identified as
confidential and which (i) is not ascertainable or obtained from public or
published information or (ii) is not known or does not become known to the
public (other than through a breach by the Lenders of this Section).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed under seal and delivered by their respective officers thereunto
duly authorized as of the date first above written.
AMERICAN DENTAL PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
FLEET NATIONAL BANK, Individually
and as Agent
By: /s/ Xxxxxx X. Xxxxxxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxxxxxx
Vice President
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